New Delhi, Aug 8: National Thermal Power Corporation (NTPC) plans to set up a joint venture with a renowned international company to undertake renovation and modernisation (R&M) of power plants in the country.

This comes close on the heels of the navratna status and powers accorded to NTPC for entering into joint ventures and consultancy contracts with foreign agencies in India and abroad.

Highly-placed official sources told The Financial Express that NTPC has already constituted a R&M group which is chalking out formalities required to set up the joint venture.

NTPC chairman and managing director Rajendra Singh confirmed the move and stated that NTPC is in the process of approaching well-known international and domestic companies. It will take NTPC two months to firm up plans for the joint venture as the R&M group is yet to submit its report, he said. Following the report of the R&M group, the formal proposal will go to the board of directors of NTPC and the joint venture is expected to start work in the next six months.

NTPC wants to hold a minority stake of 49 per cent in the proposed venture and leave the remaining 51 per cent to its partner. Sources say this is being done to avoid getting into the formalities and procedural hassles attached with a public sector entity. "Even with a 49 per cent stake, NTPC will have a major say in the working of the joint venture. With the joint venture partner having a majority equity stake, the company will not have to knock at the government's door for every small clearance or face delays in fulfiling other formalities," sources added.

Whereas Singh maintains that NTPC has not taken any decision on its joint venture partner, sources say it is likely to join hands with an international company with strong technical expertise. Many major foreign companies have independently approached the power ministry with proposals to undertake R&M programmes. Babcock and Wilcox is one such company that has approached the ministry to undertake R&M work at Indraprastha power station under the Delhi Vidyut Board. Even the ministry of power has kept the R&M programmes top most on its agenda for the Ninth Plan to achieve high plant load factors (PLFs) at existing power stations.

As per power ministry estimates, an additional 20,000 MW can be generated during the Ninth Plan if the R&M programmes are implemented expeditiously. The fund requirement estimated for these schemes is about Rs 10,000 crore.With an authorised capital of Rs 8,000 crore, NTPC's total approved investments stands at Rs 31,344 crore as on March 31, 1997. It plans to add 6,270 MW capacity during the Ninth Plan. NTPC has 11 coal-based and five gas-based power stations which constitute 20 per cent of the total installed capacity of the country.

Presently, NTPC has two joint ventures with Spectrum Power Generation Ltd and BSES. It has undertaken consultancy assignments on turnkey basis in Dubai, Nepal and Tanzania and has orders worth Rs 155 crore to implement further turnkey contracts.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.