NTPC, BHEL in Rs6,000-crore power plant equipment JV

Mumbai: National Thermal Power Corporation (NTPC), the country's largest power utility and Bharat Heavy Electricals (BHEL) will together invest Rs6,000 crore in a joint venture firm for manufacturing power plant equipment.

The 50:50 joint venture, to be called NTPC-BHEL Power Projects Ltd (NBPPL) is likely to finalise its business plan within a fortnight.

The proposed joint venture will manufacture boilers and turbines equipped to charge up 5,000 MW of greenfield thermal capacity by the year 2013.

The joint venture will initially take up engineering, procurement and construction (EPC) contracts, mainly in the areas of critical balancing of plant equipment and will have manufacturing bases across three possible sites - Visakhapatnam for boilers, Pune for turbines and a possible site in West Bengal for balance-of-plant equipment.

The project, which will be funded on a 70:30 debt-equity ratio, has already set up an administrative office in Noida. NBPPL has been incorporated with an initial equity capital of Rs5 crore. The joint venture is in the process of appointing its chief executive soon, who will be nominated either by BHEL or NTPC.

BHEL and NTPC, will bring in Rs900 crore each as equity and the balance Rs4,200 will be mobilised as debt.

Announcing the decision, union minister of state for power and commerce Jairam Ramesh said the government has readied NBPPL's business plan and it would be tabled for discussions soon.

Ramesh said NBPPL would undertake three broad categories of business in three phases. In the first phase, the company will compete for engineering procurement and construction jobs for power plants in India and overseas. The second phase will involve manufacturing a critical balance of plant equipment for power units and in the final phase, it will set up a power equipment manufacturing plant.