The Hindu Business Line : Efforts to link Kerala-Central PSUs on course: Minister

Thiruvananthapuram June 21 The Kerala Government's efforts to forge tie-ups between State and Central public sector undertakings are right on course, said the State Industries Minister, Mr Elamaram Kareem.

The Minister told newspersons here on Thursday that the joint venture between Transformers and Electricals Kerala Ltd (TELK) and the National Thermal Power Corporation (NTPC), the agreement for which would be signed on June 23, augured well for the Government's initiatives in that direction.

He said it had been decided to hand over the Kerala Hitech Industries Ltd (Keltec) to the Defence Research and Development Organisation (DRDO) under the Defence Ministry. An expert committee from DRDO had visited Keltech and given a favourable report to the Centre.

Similarly, the process for establishing a rail bogie unit at Autokast by the Railways is progressing well. A team of officials from the Railway Board had visited the Autokast factory last month and RITES, which did the valuation study, had submitted its report to the Railways.

The State Government is also trying for a joint venture between Steel Complex Ltd and the Steel Authority of India Ltd (SAIL). Talks had been held with the Union Steel Minister, Mr Ram Vilas Paswan, in this regard and his response was favourable. SAIL has posted two of its officials at the Steel Complex plant to study the company's day-to-day operations.

The Minister said that the agreement being signed between TELK and NTPC would be mutually beneficial for the companies. While TELK would have the controlling stake of 51 per cent in the joint venture, NTPC would get 44.6 per cent.

Of the remaining 4.4 per cent, Hitachi of Japan, with which TELK had a technical collaboration in the early days, will continue to hold four per cent. The remaining shares are held by the public.

TELK expansion

TELK will take up expansion of its facilities in three phases under the joint venture. The first phase will focus on achieving total utilisation of the installed capacity. Though the capacity is 4,500 MVA, only 75-80 per cent is utilised due to obsolescent machinery and equipment.

In the second phase, the capacity will be raised to 10,000 MVA. Besides, the company will start manufacturing 20 high-capacity transformers a year. In the third phase, the company will equip itself for mobile repair of large transformers at their installation site.

The Minister said the total investment during the first two phases was estimated at Rs 190 crore. This would be financed at a debt-equity ratio of 65:35.

NTPC would pay Rs 31.34 crore to TELK as the value of its 44.6 per cent share in the joint venture.

An important clause in the agreement would be that if any of the partners wanted to sell its stake, the first right to its purchase would be vested with the other partner. It could be sold to a third party only if it rejected the offer, the Minister said.