BHEL ties up with NTPC

NEW DELHI: Public sector equipment manufacturer BHEL and power generation company NTPC have signed an MoU to form a joint venture for carrying out engineering, procurement and construction (EPC) activities in the power sector. The co-operation between the two PSUs comes at a time when the government is contemplating to set up a second BHEL, promoted by NTPC.

As per the MoU, both NTPC and BHEL will have 50:50 equity participation in the new venture. The exact capitalisation of the company is still to be worked out. It has been decided that the post of chairman and managing director of the proposed JV company shall be rotated among senior officials of both the companies.

The proposed venture would take up EPC contracts for power projects, both in domestic and overseas market. While NTPC would provide its expertise in design, engineering, construction and project management of power projects, BHEL would pitch in with its expertise in equipment and engineering.

Both BHEL and NTPC were in midst of a controversy recently where the former strongly objected to a government proposal to allow NTPC to enter into equipment manufacturing. BHEL enjoys almost a monopoly status in this area and was against the idea of a generator entering into manufacturing.