The Hindu Business Line : NTPC-BHEL may drop out of Oman project

NATIONAL Thermal Power Corporation (NTPC) and Bharat Heavy Electricals Ltd (BHEL) are likely to drop out of the race to bid for Oman Government's $1-billion Sohar Water and Gas project.

The last date for submission of bids for the project is March 22 and it is unlikely that a response will be forthcoming, officials associated with the negotiations between the two companies said.

Sometime in late November last year, NTPC and BHEL joined hands on a 50:50 basis to bid for the water and power project. This is the first time that NTPC and BHEL were looking at acquiring equity stakes in a power project abroad. They appointed Ernst and Young as consultants to advise them on preparing a bid for the project. The joint venture was conceived on the basis that NTPC would bring to the table its expertise in setting up and operating power plants and BHEL would complement this role as an able equipment supplier.

The Sohar project, which is scheduled to be completed in 2006, has invited response from global majors AES Power and Marubeni. The project involves the setting up of a desalination plant of 60 million gallon per day (mgd) capacity and a 450 MW power plant.

The joint venture between NTPC and BHEL is not taking off since BHEL has reservations on sizeable quantum of equity investments as well as financial guarantees that would require to be given for the project. When contacted, senior BHEL officials refused to `confirm or deny' the issues plaguing the proposed joint venture.

NTPC officials, declined to comment on the development.

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