New Delhi: State-owned Bharat Heavy Electricals Ltd, or Bhel, is in separate talks with European engineering companies Siemens AG and ABB Ltd and Japan’s Toshiba Corp. to form a joint venture that will build power transmission links across India, said a top Bhel official.
Bhel is so keen on the project that it’s even willing to concede a majority stake to the foreign partner it ultimately chooses.
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“We are even ready to give them (one of these three companies) a share or even a majority stake” in the joint venture, said the executive who’s familiar with the development but did not want to be named.
An ABB India spokesman declined to comment. Questions emailed to Toshiba were not immdediately answered. A Siemens AG spokesperson, in an email reply, didn’t comment specificially on the joint venture talks, but said the German firm was already cooperating with Bhel in a transmission system for Power Grid Corp. of India Ltd.
Bhel, the country’s biggest power equipment maker, is also eyeing new businesses and planning joint ventures in areas such as automation of electricity sub-stations and high-voltage distribution systems and gas-insulated switch gears, or GIS, as it faces intense competition from overseas firms, especially Chinese suppliers. GIS help in saving space and improving efficiency for distribution networks.
“It (these new areas, including transmission) can either be an umbrella collaboration or independent collaborations and will require an investment of Rs2,000 crore,” added the same Bhel official.
Despite a slowdown in economic growth, Bhel is confident of going ahead with the new business plans because it has a substantial cash surplus and an order book position of Rs1.15 trillion. “We are a zero debt company and this is a good time to go ahead with this plan,” the official said.
“Bhel already manufactures transformers for the transmission and distribution sectors. As of now, there is no manufacturer for the 1,200kV sets in the country. While there may be no short or medium benefits to Bhel, in the long run, if our transmission systems get planned for high voltages, it will prove beneficial for Bhel,” said Madanagopal R., an equity research analyst at Centrum Broking Pvt. Ltd.
The Bhel official said the company is also in talks with two overseas European companies for offering a 20% stake in its equal joint venture with Nuclear Power Corp. of India Ltd for manufacturing 700MW nuclear turbines. “We have shortlisted two companies,” said the executive, without giving details.
The joint venture is for the manufacture of nuclear-powered turbines and generators with capacities of 1,000MW and 1,600MW and will take up engineering, procurement and construction activities for the conventional portion of the nuclear reactors, with proposed investment of Rs500 crore. Bhel has a nuclear shop, which provides components for nuclear research.
The company has an annual manufacturing capacity of making power equipment that have a total capacity of 10,000MW, which Bhel plans to raise to 15,000MW a year by December 2009.