NTPC to Quit 50:50 JV with BHEL for Mfg Power Equipments

The JV's first manufacturing facility at Mannavaram in Chittoor district of Andhra Pradesh started operations in 2016 but had very little orders.

NTPC Ltd, formerly known as National Thermal Power Corporation Ltd, has decided to quit its 50:50 Joint Venture (JV) with BHEL, by saying it is not an equipment manufacturer and would rather concentrate on setting up and operating power plants.

NTPC-BHEL Power Projects Pvt Ltd was set up in December 2007 for manufacturing power equipment. The JV's first manufacturing facility at Mannavaram in Chittoor district of Andhra Pradesh started operations in 2016 but had very little orders.

The company officials said, the company has decided to exit the venture and has informed the power ministry about its intentions.

The power producer wants BHEL to buy its equity in the JV, the company officials added. The two companies had invested Rs 50 crore each as equity in the JV.

NTPC wants BHEL to acquire its 50 per cent stake in the JV as also all the assets and liabilities and absorb all the employees, they said.

Further, the JV had little revenue visibility and needed a fresh injection of new orders or a new blueprint to sustain itself.

Also, a drying market for thermal power equipment has had a toll on the joint venture company. Fund crunch, land acquisition and environmental issues, general lack of demand for coal-based power and government's emphasis on renewable sources of power have left little to fight for in the thermal power equipment market.

Source: PTI