The Hindu Business Line : NTPC, Bharat Forge scaling up equipment manufacturing ties

Plans ahead
The proposed venture is actively exploring opportunities related to power equipment manufacturing in a comprehensive manner, starting with balance-of-plant equipment and then going on to main plant packages and components.

Anil Sasi

New Delhi, March 11 NTPC Ltd and Bharat Forge, which recently got together to manufacture casting, forgings, fittings and high pressure pipings for the power sector, are looking at the possibility of scaling up their partnership for a full-fledged foray into power equipment manufacturing.

“The proposed venture is actively exploring opportunities related to power equipment manufacturing in a comprehensive manner, starting with balance-of-plant equipment and then going on to main plant packages and components, including possibly turbines,” a senior Government official involved in the exercise said. The possibility of a strategic partner being roped in at a later date is also being looked at, the official said.

NTPC and Bharat Forge had signed a MoU on February 8 to set up a joint venture company with initial equity participation of 49:51 respectively for setting up an equipment manufacturing facility. NTPC already has in place a similar pact with Bharat Heavy Electricals Ltd (BHEL) to set up a 50:50 joint venture company for taking up engineering, procurement and construction (EPC) assignments.

NTPC’s backward integration plans come in the wake of an ongoing tussle between the power major and BHEL on the issue of equipment supplies for some of NTPC’s projects. 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.

So far, BHEL has designed and manufactured generating equipment of various ratings that accounts for about 70 per cent of NTPC’s installed generation capacity of 27,904 MW.

NTPC plans to triple its power generation capacity to 75,000 MW by 2017, while intensifying its focus on newly diversified areas including hydroelectric projects, coal mining and nuclear energy. The company plans to add about 21,941 MW generation capacity during the Eleventh Plan period (2007-12), at an estimated expenditure of Rs 1,60,000 crore.