May 17, 2008

BHEL to spend INR 5,000 crore on JVs

BS reported that power equipment manufacturer Bharat Heavy Electricals Ltd is likely to spend nearly INR 5,000 crore over the next three years in its yet to be formed JV companies with power utility NTPC and Nuclear Power Corporation of India Ltd.

Mr K Ravi Kumar CMD of BHEL said that “Some of this money will also be spent on other possible ventures with private sector companies.”

Mr Kumar said that BHEL and NTPC agreed to form a joint venture in September 2007 to construct power plants and also manufacture power equipment. He added that the new company was likely to be formed by next month. The proposed company will take up projects both in the country and overseas.

Mr Kumar said that a joint venture with NPCIL is also likely to be formed in the first half of the next financial year. The joint venture is likely to take up engineering, procurement and construction for nuclear power plants in India and overseas. NPCIL, which is the only company mandated to set up nuclear plants in India, currently generates about 3,900 MW of electricity from its 16 power plants. The company plans to more than double its capacity to 10,000 MW over the next six years.

BHEL in which the government owns 67.72% stake is also looking to buying a mid to small sized company for which it has INR 1,000 crore. Mr CS Verma finance director of BHEL said that “We are talking to many companies in India and overseas and we are primarily looking at companies in the US and Europe. He added that the company, which has cash reserves of over INR 4,000 crore, would fund these investments through its internal accruals.