Temat: Foreign firms queue up for new REL JV

Foreign firms queue up for new REL JV
Sanjay Jog

January 05, 2008

Mumbai, Jan 4 A slew of foreign majors have held talks with Reliance Energy Ltd (REL) for a tie up in boiler-turbine-generator (BTG) manufacturing for the power sector. REL, which has firmed up plans to add generation capacity of 28,000 mw with an investment of over Rs 1 lakh crore through its arm Reliance Power Ltd (RPL), proposes to make its foray into the production of BTG and related power equipment. The JV would supply BTG and other equipment to RPL as well as other power producers.

Dussan, Dongfang Electric Corporation, Shanghai Electric Company, Alstom, Toshiba, Mitsubishi, Ansaldo Caldaie and a few European and Korean Companies have evinced interest in a tie-up with REL. A source in the know told FE, “REL is yet to strike a deal, though discussions are being carried out at the top level. REL is weighing all options, including a JV of 51:49 and 50:50 for the proposed venture.”

According to sources, the per-megawatt investment for BTG is estimated at Rs 2 crore. For a manufacturing facility with capacity of 5,000 mw, an investment of Rs 10,000 crore is needed. For boiler manufacturing, the investment will be of a different order and similar is the case for a turbine-generator combination.

Earlier, REL chairman Anil Ambani, at a media briefing to announce Reliance Power Ltd’s proposed IPO, said the company has been in talks with several players in the power equipment segment.

“As far as sourcing equipment for the proposed capacity addition, attention is being paid on timely delivery of equipment by adhering to specific schedules and quality. The company will decide the equity structure only after concluding the talks,” he said.

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