SAIL would enter into a shareholder's agreement with NTPC on Friday for transfer of shares and management of the Sail Power Supply Company Ltd, a Sail subsidiary, official sources said.

Both corporations had earlier agreed in-principle to forma joint venture with a debt-equity of 70:30. The NTPC-Sail joint venture has, however, agreed to acquire only two power plants at Rourkela and Durgapur totalling a capacity of 240 MW, sources said. Sail had quoted a value of Rs 200 crore each for the two captive power plants. This was part of Sail's over Rs 8,400 crore turnaround package approved by the cabinet in February, 2000, which had also allowed the corporation to hive-off non-core activities including sale of captive power plants, fertiliser and oxygen plants.

NTPC had appointed Mecon Consultants to get these plants evaluated independently, sources said adding that final report by Mecon had endorsed the value of the plants quoted by Sail. The joint venture company would be primarily selling the entire power to Sail for its captive consumption but could approach private customers in case of surplus power, sources said.

Asked about the tariff fixed for Sail, source said it would be cheaper than the commercial rate but refused to give further details saying all these have been worked out keeping in mind interests of both the parties. NTPC officials, however, said that overall NTPC-tariff mechanism would be implemented and added that the joint venture company would be targetting a turnover of between Rs 500 to 600 crore annually. They also said that no fresh investments were required in the plants.

(PTI)