MUMBAI, July 31: Anil Ambani-promoted Reliance Infrastructure will build a Rs 12,000-crore power equipment plant in a joint venture with Chinese behemoth Shanghai Electric Corporation.The proposed unit, which is expected to be bigger than state-run Bharat Heavy Engineering (Bhel) in terms of capacity, will come up by 2010 with an initial capacity of 10,000 mw.
“Both companies will sign a framework agreement for long-term strategic cooperation on Monday. Reliance Infra Chairman Anil Ambani and Xu Jianguo, the chairman and CEO of Shanghai Corp, will be present at the signing ceremony,” said a source in Reliance Infra said.
The 50:50 JV will raise around Rs 9,500 crore as debt for the proposed plant. A major chunk of the fund is expected to be sourced from foreign banks.
Last year, engineering and construction giant Larsen and Toubro (L&T) announced that it would build plants for super critical boilers and turbines in a partnership with Japan’s Mitsubishi. The JV entails an investment of Rs 1,500 crore and the plant will be completed by 2009. The manufacturing base will come up at Hazira, Gujarat.
The Reliane Infra venture is being set up to cater to the growing demand in the domestic and neighbouring markets. Reliance Infra is also planning to sign four more joint ventures with Shanghai Corp to offer a range of third-party services to power utilities in India.
The services likely to be offered are in the domains of technical and design support, operations and maintenance, after-sales services and erection of power equipment. This would involve a combined investment of $400-600 million and generate up to 400 jobs, according to sources.
(Source: Business Standard, Mumbai)