deals between two giants for construction

Bharat Heavy Electricals (BHEL), may offer a minority equity stake to a third technology partner in its proposed joint venture with Steel Authority of India Ltd (SAIL) to manufacture high-grade steel.

B P Rao, Chairman and Managing Director, BHEL, said that they are in discussions with SAIL for construction of plant. The company estimates this construction will take more five-six months to finalise. Also, the company is looking for a third technology partner. The Company will offer a minority stake to the third party, while BHEL and SAIL might have equal stake in the venture.

The high-grade steel used to make power equipment is currently imported. BHEL's move is aimed at securing domestic supplies of essential raw material like CRGO steel, alloy steels, castings and forgings, among others.

Its order book is Rs 1,44,000 crore and it has the capacity to manufacture power equipment with a cumulative generation capacity of 15,000 Mw per annum, to be increased to 20,000 Mw by the end of 2010-11. It also plans to increase investment on its research and development to Rs 1,200 crore by 2011-12, from Rs 829 crore in 2009-10.