Mumbai, June 23: L&T-Komatsu, the recently formed joint venture of Larsen & Toubro and Komatsu of Japan, will kick off with a paid up capital of Rs 120 crore.

L&T will contribute Rs 60 crore to the new company which will carry on the business of manufacturing business equipment including hydraulic excavators, currently made at the Bangalore works.

According to the annual report of the company which was issued here on Monday, shareholders approval will be sought to hive off a part of the Bangalore works to L&T-Komatsu. The objective of this joint venture is to ensure that there is state-of-the-art technology for hydraulic excavators.

As the notice to the annual general meeting scheduled on August 1 says, this business has excellent growth potential given its linkage with the growth in infrastructural areas. Dependence on the company's R&D efforts alone would, in the long run, leave it with a "substantial technology gap" as global leaders introduce new models with the latest technology.

L&T will, even after the formation of L&T-Komatsu, continue to market and provide product support to the hydraulic excavators to be manufactured by the new joint venture company. It is expected that the infusion of new technology would improve the market position in this line of business.

L&T has received an order of construction of the Narmada bridge on build-own-operate-transfer basis for the ministry of surface transport.

For execution of this order, the company has promoted a special purpose vehicle company styled Narmada Infrastructure Construction Enteprises Ltd and will subscribe to its equity capital to the extent of Rs 30 crore.

L&T has also received a letter of award for setting up a combined cycle cogeneration power plant for Haldia Petrochemicals Ltd (HPL) on a build-own-operate basis. To reduce risks, the project will be implemented through a separate company. Hence, HPL has already formed a new company, HPL Cogeneration Ltd (HPLCL) which will have an equity capital of Rs 117 crore for which L&T will subscribe to Rs 86.58 crore.

The company is bidding for several projects on build-own-operate-transfer basis and may have to make investments in the special purpose vehicle companies to be formed for taking up such projects. The investment required in such companies is Rs 200 crore.

The annual report indicates that L&T has formed a new joint venture company called International Seaports Pte Ltd along with Stevedoring Services of America, Seattle and Precious Shipping Public Co Ltd, Bangkok to enter the port sector. The new company has recently signed an MOU with the government of Orissa to develop a port at Dhamra.

The detailed project report for the 200 MW naphtha-based power project at Hassan, in association with Karnataka Breweries has been finalised. The state electricity board has done the detailed review and is expected to forward the project report shortly to the CEA for techno-economic clearance.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.