Public sector giants NTPC and BHEL have decided to float a new joint venture company for executing power sector projects in India and abroad.
This follows a directive from the Prime Minister?s Office. The JV will also bid for executing ultra-mega power projects. A senior power ministry official said the two companies signed a memorandum of understanding on Friday to this effect.
A government official said, the PMO stepped in following increased rivalry between the two state-owned companies over a number of issues. On one hand, NTPC, along with the power ministry, was blaming BHEL for late execution of projects. On the other, BHEL was holding NTPC responsible for not awarding projects on time.
Backed by the power ministry, NTPC had also announced it might begin manufacturing power equipment. But asking NTPC to compete would have been a tough ask as BHEL has over 65% of market share. NTPC closed at Rs 187.05 at NSE while BHEL closed at Rs 1,885.65 on Friday. A formal exchange of documents will take place on Monday.