BHEL seeks partners for W Asia foray

Bharat Heavy Electricals Ltd is scouting for joint venture partnerships for acquiring minority stakes in three equipment manufacturing entities in West Asia. The company is planning this foray in order to increase its market access in the region.

The target firms manufacture power transmission products and will provide the Indian power equipment major with a base to service its existing and future equipment installed in the region.

Although the planned investment is relatively small, around $2 million each, BHEL Chairman and Managing Director AK Puri told Business Standard, "We are looking for good intellectual property rights complimenting our products either through joint ventures or acquisitions."

The company will sign a memorandum of understanding with the Power Grid Corporation (PGCIL) for setting up transmission projects overseas. It is exploring similar overseas partnerships and revenue-sharing arrangements with NTPC Ltd and ONGC Videsh Ltd.

Elaborating on the partnership arrangement with the PGCL, Puri said, "Our arrangement with the company entails building substations for the power transmission major. The first project may be completed by 2007-08."

The arrangement will be opportunity linked. There may be instances when BHEL may go solo or PGCIL may like to bid alone.

"We are open to that kind of arrangement. When we partner with them, operations and maintenance will be given to the transmission major. Revenue sharing will be done on the basis of work involved," Puri added.

A similar arrangement is in the offing with ONGC Videsh. Puri said the oil company could leverage BHEL's access to get oil blocks in countries with poor power infrastructure.

On the whole, BHEL is buoyant about its overseas forays. "On an average we are involved in 20 bids for overseas projects, involving orders worth around Rs 2,000 crore," Executive Director Ravindra K Belapurkar said.