The Hindu Business Line : BHEL, NTPC sign jt venture agreement for EPC activity

New Delhi, Dec. 17 Bharat Heavy Electricals Ltd (BHEL) on Monday announced it has signed an agreement with the country’s largest power generator NTPC Ltd for setting up a joint venture company for carrying out engineering, procurement and construction (EPC) activities in the power sector.

“A joint venture agreement between the company and NTPC has been signed for establishment and operation of a joint venture company for taking up EPC business,” BHEL said in a filing to the Bombay Stock Exchange.

A memorandum of understanding (MoU) in this regard was signed between the two companies on September 10 this year. The post of CMD for the proposed joint venture company shall be rotated among the senior officials of NTPC and BHEL.

COMPLEMENTARY

“Through the joint venture company, to be owned by BHEL and NTPC on a 50:50 equity participation basis, the two companies will work jointly to complement their respective core strengths in the power sector,” a BHEL official had said at the time of signing of the MoU.

The development comes in the backdrop of an ongoing tussle between the two state-owned companies over NTPC’s proposed move to foray into BHEL’s home turf of equipment manufacturing.

NTPC and the Power Ministry had passed on much of the blame for the slippage of the Tenth Plan capacity addition target on BHEL by citing “delays” in supply of equipment by the latter.

WORKING TOGETHER

NTPC, as a generation utility, and BHEL, as an EPC contractor, have worked together on several domestic projects earlier, though without a formal partnership in place. BHEL has designed and manufactured equipment that accounts for about 70 per cent of NTPC’s current installed capacity.