NTPC-BHEL venture eyes equipment manufacturing

The new BHEL-NTPC joint venture could virtually create a brand new player in the equipment manufacturing space in the country.

The new venture, christened NTPC-BHEL Power Projects Pvt Ltd., is likely to aim at setting up greenfield facilities with an annual capacity for manufacturing generation sets totalling 5,000-MW by 2012.

The venture could set up manufacturing base across three possible sites — Visakhapatnam for boilers, Pune for turbines and a possible site in West Bengal for balance-of-plant equipment, according to Government sources.

“BHEL is set to take over Visakhapatnam-based Bharat Heavy Plate and Vessels Ltd. and hence that could be the logical location for making boilers.

The engineering hub of Pune could well be the location for manufacturing turbines while possible sites in West Bengal are being considered for setting up a facility for balance-of-plant equipment, including coal handling plants,” a Government source involved in the exercise said.

The venture, which is set to be launched on Tuesday, is scheduled to take a final call on the locations in the due course.

Having been initially envisaged with the specific mandate to take up engineering, procurement and construction (EPC) contracts in India and abroad, the venture plans to spend up to Rs 10,000 crore through a combination of debt and equity for kicking off equipment manufacturing operations. The EPC mandate for the new venture includes plant engineering, project management, quality insurance, quality control, procurement, logistics, site management, erection and commissioning services.

“NTPC Ltd. and BHEL intend to work jointly to complement their respective strengths through formation of the JV.

“Considering the large capacity addition plan in the country during the Eleventh and Twelfth Five Year Plans, there is a need to expand the domestic power equipment manufacturing capability as well as to strengthen the related manufacturing activities including Balance of Plant etc.

“NTPC Ltd. and BHEL intend to leverage their respective strengths and synergies to set up manufacturing facilities of energy related equipments for generation of power and also for taking up EPC of power plants and other infrastructure projects,” an official said.

Hitherto, 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.




Source;
http://www.thehindubusinessline.com/2008/04/29/stories/2008042950260300.htm