Reliance power exploring tie up with BHEL
In what could transform into the biggest public-private joint venture in the power sector, public sector Bharat Heavy Electricals (Bhel) and Reliance Power (RPL) are exploring possibility of a tie-up for equipment manufacturing.
Reliance Power recently announced its intention to venture into power equipment manufacturing. The company, which is part of the Reliance-Anil Dhirubhai Ambani Group (R-ADAG), is in talks with the public sector engineering major to leverage its expertise in manufacturing. Bhel and Reliance Power would have equal equity partnership in the proposed special purpose vehicle (SPV).
“Initial talks have taken place between top officials of both the companies and a high level meeting between officials of Reliance Power and Bhel is also likely this week to finalise the road map for the proposed venture. The venture is likely to be implemented by an SPV where both the companies would have 50:50 equity partnership,” an industry source close to the development said.
When contacted, a power ministry official said the,re is no problem with the possible tie-up as the Cabinet has made way for such associations by clearing the ONGC-Mittal tieup.
“We are open to all types of associations which would be in the interest of the country, but the development is at an initial stage,” the source said.
Bhel is tying up with several companies for increasing its manufacturing capacity. The government has set a target of adding over 78,000 mw of generation capacity during 11th Plan. Bhel would be able to meet just over 50% of this target even with its proposed expansion. The company is, therefore, looking at all options to expand its manufacturing base.
Reliance Power on the other hand has plans to set up 13 projects with total capacity of 28,200 mw. Of this, 10,300 mw is gas-based, 3,300 mw is hydel and the rest is coal-based. While the company is looking all over the globe for equipment suppliers, it has favoured its own manufacturing facilities to reduce cost of generation and timely completion of projects.
It is expected that the proposed JV with Bhel would not be restricted for captive use of Reliance Power and venture would look for commercial business from other power stations too.
Source: Economic Times
Reliance Power recently announced its intention to venture into power equipment manufacturing. The company, which is part of the Reliance-Anil Dhirubhai Ambani Group (R-ADAG), is in talks with the public sector engineering major to leverage its expertise in manufacturing. Bhel and Reliance Power would have equal equity partnership in the proposed special purpose vehicle (SPV).
“Initial talks have taken place between top officials of both the companies and a high level meeting between officials of Reliance Power and Bhel is also likely this week to finalise the road map for the proposed venture. The venture is likely to be implemented by an SPV where both the companies would have 50:50 equity partnership,” an industry source close to the development said.
When contacted, a power ministry official said the,re is no problem with the possible tie-up as the Cabinet has made way for such associations by clearing the ONGC-Mittal tieup.
“We are open to all types of associations which would be in the interest of the country, but the development is at an initial stage,” the source said.
Bhel is tying up with several companies for increasing its manufacturing capacity. The government has set a target of adding over 78,000 mw of generation capacity during 11th Plan. Bhel would be able to meet just over 50% of this target even with its proposed expansion. The company is, therefore, looking at all options to expand its manufacturing base.
Reliance Power on the other hand has plans to set up 13 projects with total capacity of 28,200 mw. Of this, 10,300 mw is gas-based, 3,300 mw is hydel and the rest is coal-based. While the company is looking all over the globe for equipment suppliers, it has favoured its own manufacturing facilities to reduce cost of generation and timely completion of projects.
It is expected that the proposed JV with Bhel would not be restricted for captive use of Reliance Power and venture would look for commercial business from other power stations too.
Source: Economic Times
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