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2 power JVs of SAIL, NTPC to be merged
By agencies
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Friday, 06 January 2006, 20:30 IST
KOLKATA: IndiaÂ’s two leading public sector enterprises - Steel Authority of India Ltd (SAIL) and National Thermal Power Corporation Ltd (NTPC) - are set to merge two of their existing 50:50 joint ventures into a single entity.
Both the joint venture companies NTPC SAIL Power Company Pvt Ltd (NSPCL) and Bhilai Electric Supply Company Pvt Ltd (BESCL) were established in March 2001 and March 2002 respectively. According to a senior SAIL official, the board of directors of the respective companies has already approved the proposal. He said, “The SAIL board is likely to approve it in the next meeting which is scheduled on January 27. Once it is cleared, the merger process would begin.”
NTPC and SAIL were for quite some time considering the merger of these two entities as they are in the same business of power generation and under the same management. Sources said the proposed merger would help both the entities to reduce the operational, administrative and managerial expenses.
At present, the total capacity of NSPCL is 120 MW, and it runs two 60 MW units, each located adjacent to the Durgapur and Rourkela steel plants. BESCL's total capacity is 74 MW and is spread over three units, located at Bhilai Steel Plant. BESCL is adding new power capacity of 500 MW (2 x 250 MW) at Bhilai. The estimated cost of this project is $563.63 million. Both companies are investing 30 percent of the project cost and the rest is funded through market borrowings. The first unit will be operational by the end of March 2007 and the second by October 2007.