New Delhi: BHEL, public sector equipment maker and NTPC, power generation company, have signed up a memorandum of understanding (MoU) to set up a joint venture in order to accompolish executing engineering, procurement and construction (EPC) activities in the power segment.

The cooperation between the two PSUs occurs at a time when the administration is thinking over establishing a second BHEL, promoted by NTPC.

According to the contract, both NTPC and BHEL will possess 50:50 equity participation in the new business enterprise. The exact capitalization of the new venture is still to be computed. It has been decided that the post of chairman and managing director of the planned JV business shall be revolved among senior functionaries of both the companies.

The projected venture would take on EPC contracts for power projects, both in domestic and abroad market. Whereas NTPC would provide its proficiency in planning, manufacturing, production and project management of power projects, BHEL would pitch in with its capability in equipment plus engineering.

Both BHEL and NTPC were in middle of a contestation recently where the former powerfully rejected to a administration offer to let NTPC to enter into equipment manufacturing. BHEL enjoys almost a monopoly status in this region and was against the thought of a generator entering into manufacturing.