New Delhi: To attract and retain talent, newly-created NTPC Bhel Power Projects Pvt. Ltd (NBPPL) will offer pay packets similar to those offered by the private sector, said a top company official.
“I don’t think there are many such entities with public sector participation in the country that offer competitive salaries,” said C.P. Singh, chairman and managing director of NBPPL, an equal joint venture (JV) set up by Bharat Heavy Electricals Ltd (Bhel) and NTPC Ltd in April this year. “The only other example we have is of Bhel’s joint venture with General Electric Co. (GE), called Bhel-GE Gas Turbine Services Pvt. Ltd that provides after-market services for GE’s gas turbines.”
NBPPL was set up to bolster production of power generation equipment and handle engineering, procurement and construction contracts to meet the growing demand in the country.
“There should be a compelling value proposition that makes joining NBPPL attractive,” Singh said. He didn’t disclose specific details of the pay NBPPL plans to offer.
While the difference in salaries at Bhel-GE Gas Turbine Services and Bhel at entry-level positions is not much, there is a significant gap at manager-level positions.
A manager at Bhel earns around Rs8-10 lakh a year, while his counterpart at Bhel-GE Gas Turbine Services makes Rs12 lakh. A general manager at Bhel earns around 17 lakh a year compared with the Rs21 lakh a year a general manager gets at Bhel-GE Gas Turbine Services. At the entry level, engineers at both the firms earn around Rs4 lakh a year.
Public sector units (PSUs) are governed by standardized pay structures, which are not as attractive as those offered by the private sector.
While the salaries offered by both NTPC and Bhel are marginally higher than the private sector’s at entry-level engineering positions, engineers employed in the private sector at senior manager-level positions earn salaries four times that of their PSU counterparts. A senior manager-level employee in a PSU typically earns around Rs8-10 lakh per annum.
The total manpower planned for NBPPL is around 1,585 over five years. The company has a paid-up capital of Rs5 crore and plans to manufacture boilers at Visakhapatnam in Andhra Pradesh; turbines and generators at Pune in Maharashtra; and the balance of plant equipment at Durgapur in West Bengal.
“Competitive compensation is a welcome initiative. But when we look at competition, we must look at it holistically, including costing the many benefits that exist in the public sector. But a strong human resources strategy to retain employees must also look at a good performance management strategy, clarity and empowerment to engage and retain senior talent,” said Bangalore-based human resources adviser Hema Ravichandar.
Bhel and NTPC plan to jointly offer 50% equity in the new entity to private companies.
“In order to work its way around the problem, the venture’s equity structure will be changed with only 50% remaining with Bhel and NTPC, with the balance being offered to different private companies as a leverage for manufacturing and technology tie-ups,” said a senior NTPC executive, who didn’t wish to be named.
Alstom Projects India Ltd is one such company that may partner with the new JV to manufacture turbines and generators as reported by Mint on 30 April.
India has a power generation capacity of 143,000MW and plans to add another 78,577MW by 2012.
Currently, Bhel has a near-monopoly in the domestic power generation equipment space, with 60% market share. In the five years to 2007, the country missed its target to add capacity by almost 49% and experts say unavailability of power generation equipment was a major reason for this.
The alarming attrition levels at leading PSUs have now begun to affect the domestic power sector.
NTPC alone has lost 100 engineers in the past one year to firms such as Tata Power Co. Ltd, Reliance Infrastructure Ltd (earlier known as Reliance Energy Ltd) and Lanco Infratech Ltd.
The company expects attrition to double to 200 engineers by 2012.