SAIL, NTPC to merge two joint ventures

Steel Authority of India (SAIL) and National Thermal Power Corporation (NTPC) are planning to merge their two joint ventures into a single entity for greater operational and administrative efficiency.

The two companies - NTPC SAIL Power Company (NSPCL) and Bhilai Electric Supply Company (BESCL) - are 50:50 joint ventures, and were formed to meet the electricity requirements of SAIL's plants at Durgapur, Rourkela and Bhilai.

The two companies were initially subsidiaries of SAIL, but the steel major later offloaded half the stake in each firm to NTPC for better operational management.

"The cabinet decision allowing navratna PSUs to invest more than Rs 200 crore in a JV will enable us to merge the two companies to form a single entity," a top SAIL official said today.

The union cabinet had, last week, allowed navratna PSUs to establish joint ventures with investmnent up to 15% of their net worth in one project. The limit for navratna companies for setting up subsidiaries and JVs was raised to Rs 1,000 crore from Rs 200 crore in one project.

SAIL has already initiated the process, and NTPC has "broadly agreed to the merger proposal," the official said.