Initial equity of the company is pegged at over Rs 10 crore and both he partners will hold 50 per cent stake each, NTPC chairman and managing director Rajendra Singh told The Financial Express. "Equity of such a company is not large because the projects do not require investment," he said. NTPC and ABB will have equal representation on the board.

The new company has intensified competition for R&M projects as another state-owned entity, Bharat Heavy Electrical (Bhel), already has a joint venture with Siemens of Germany to undertake similar works. Apart from these two joint ventures, other local and overseas companies, too, carry out R&M projects. The Centre had allowed private participation, including foreign outfits, in this area around four years ago.

The NTPC board had, however, cleared the proposal for setting up the joint venture last year in October. Both the companies also had signed a memorandum of understanding (MoU) for alliance.

Both the partners had since been holding talks on the formation of the company. Meanwhile, the European companies ABB and Alsthom announced merger of the companies to form new entity as ABB Alsthom. This new identity had also to be reflected in the joint venture, said NTPC officials.

"There is a large scope for R&M projects in the country as there are several power plants those are old and operating on lower capacity," said Singh. These projects are also important for the country which does not have sufficient funds to deploy in the capital-intensive power sector. Through R&M projects small investment can contribute to a significant capacity addition, Singh added.

Besides bidding for projects in India the new company will also compete for projects abroad, he said. In this case, NTPC will benefit from the brand equity of its foreign partners.

The global engineering group ABB has a strong presence in electric power generation, transmission and distribution. ABB Kraftwerke AG, Mannheim, the joint venture partner, is a turbine and genertor manufacturer. The company also specialises in R&M activities and undertake work for the its group companies engaged in hydro and thermal generation.

Though its joint venture partner is also a manufacture of power equipment, contracts for equipment for R&M projects will be awarded through competitive bidding route, said Singh.