New Delhi: Engineers India will form a joint venture company with Tecnimont SPA of Italy for execution of engineering, procurement and construction jobs in the UAE.
Tecnimont SPA, a leading international EPC contractor with a strong presence in oil and gas, petrochemical and chemical sector will hold 70% in the proposed joint venture firm while the Indian engineering and consultancy company will hold 30%, an official source said on 20 December.
The joint venture company will be registered in Madeira, Portugal, by acquiring a shell company, Lihatonbur-Consultores e Servicos, Lda, in Madeira. Madeira has been identified as the location for registering the joint venture company from tax, legal and operational point of view.
The EIL-Tecnimont joint venture will target mega projects of over 500 million dollars. While the scope of state-run EIL would be engineering, project management and part-procurement. The Italian firm would be responsible for construction, management and part-procurement.Tecnimont SPA would offload 10% of its equity to a local partner on case-to-case basis.
As its strategy for business growth, EIL has been focusing on EPC projects in international market and formation of a joint venture with a construction company of global standing would help EIL pursue EPC projects in oil and gas sector, especially in the UAE region.
The Finance Ministry, in its comments in the Cabinet note floated for formation of the joint venture. It has not favoured acquiring the shell company Lihatonbur Consultores e Servicos Lda as it had a negative networth and felt EIL and Tecnimont should form a new JV instead, the source said.