Questions over Bhels future put NTPC diversification in limbo

Mumbai, May 30 | Updated: May 31 2007, 05:30am hrs
The state-run NTPCs foray into the power plant and equipment manufacturing has hit a roadblock. The power PSU, which has planned the capacity addition of 22,000 mw in the 11th Plan period, has said that it would be possible only after the resolution of inter-ministerial issues.

The heavy industries ministries have raised certain queries relating to the future of Bhel which is the main producer and supplier of plants and equipment for the Indian power sector.

NTPCs CMD T Sankaralingam told FE, NTPC has already prepared a background on the proposed venture. However, it will happen only after the issues between the ministries of power and the heavy industries regarding NTPCs foray are resolved. Sankaralingams statement is crucial especially when the power minister Sushilkumar Shinde has been emphasising the need for NTPCs foray as Bhel was unable to fulfil its commitment at the end of 10th Plan.

At the outset, Sankaralingam made it clear that there would be a huge requirement of power plants and equipment as the target for the 11th Plan period has been the capacity addition of almost 77,000 mw. NTPC will certainly take up this job. We will consider formation of a joint venture with Bhel for this purpose as ultimately synergies between the two will be helpful for the country to achieve the desired capacity addition. He added that NTPC may also explore options relating to roping in the foreign company involved in the manufacturing of power plants and equipment.

Sankaralingam said that the results of the NTPCs entry on its own or in joint venture in the field of plant and equipment production would be visible not in the 11th Plan period but would be seen only in the 12 th Plan period (2012-17).

On the acquisition of coal mines or company in Indonesia, Sankaralingam said that at present NTPC team is in Indonesia to discuss various proposals. NTPC may go in for government-to-government tie up for coal mine and supply or form JV in the greenfield coal mining project or with the operating mining company. Besides, NTPC may source coal directly from Indonesia. NTPC is in the midst of development of captive coal mine in Jharkhand and it expects the start production from middle of 2008 or early 2009. Moreover, the company is looking at the possibilities of development of power plants in Oman and Saudi Arabia and in turn they may supply oil and gas to India.