The Hindu Business Line : Union Power Ministry okays NTPC-TELK joint venture

Corporate - Alliances & Joint Ventures
Industry & Economy - Power
Government - Policy
States - Kerala
Union Power Ministry okays NTPC-TELK joint venture

G.K. Nair

Formal order expected in a fortnight

TELK is the only PSU that manufactures high quality transformers of 10 MVA and above capacity in the country and there will be a cost advantage for NTPC. With a joint venture, TELK will have a captive market for its products.

Kochi April 30 The Union Power Ministry is understood to have approved a proposed joint venture between NTPC and the State-owned Transformers and Electricals Kerala Ltd (TELK).

A government order to this effect is expected in a fortnight after obtaining the Cabinet's approval, a senior official source told Business Line on Monday. A MoU is likely to be signed before May 18, the first anniversary of the LDF Government in the State, the official said.

The NTPC Board had decided earlier to go for a joint venture with TELK and submitted its recommendations to the Union Ministry. However, final details as to whether it would be a takeover of the TELK or a joint venture would be known later, he said.

ASSET VALUATION

In case of a joint venture, the State might prefer to keep 51 per cent stake in it while the rest would be given to NTPC as its investment in modernisation and expansion of the unit, he said. The source added that the SBI Caps had already done the asset and machinery valuation.

Such a joint venture would be beneficial to both the parties, the official said. The NTPC, which has a lot of captive requirement, would be able to curtail the lead-time in sourcing capital equipment. Besides, he said, TELK is the only PSU that manufactures high quality transformers of 10 MVA and above capacity in the country while the other suppliers are multinational companies. Hence, there will be a cost advantage when it is manufactured in its own unit, he said.

Apart from this, NTPC often needs repairing of transformers in its national network and that is done now by taking it to the repairing facilities at distant places, which is expensive. The joint venture would help it to have mobile repairing units and that in turn would result in substantial saving, he pointed out.

On the other hand, the TELK could be modernised and expanded, besides having a captive market for its products, the official added.

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