Heavy Engineering Corporation Eyes International Partnership to Manufacture Nuclear Power Equipment

State-owned Heavy Engineering Corporation Limited (HECL) (Ranchi, India) is in talks with international engineering companies for a prospective joint-venture partnership to manufacture equipment for nuclear power projects. Discussions are in progress with General Electric Company (Fairfield, CT), Alstom SA (Levallois-Perret, France) and Areva (Paris). HECL plans to hold the majority stake in this joint venture, reports Industrial Info Resources (Sugar Land, TX).

Established in 1958 as a state-of-the-art engineering company, HECL has also contributed to the development of India's space and defense sectors. The company was one of the equipment suppliers for India's first moon mission, Chandrayaan-I. The satellite launch pedestal for India Space Research Organization's (Bangalore) GSLV-MKIII project was also built by HECL.

The company had formerly been referred to as a "sick" unit to the Board of Industrial and Financial Reconstruction (BIFR). But it is back in green and has been out of BIFR since 2008 with a net profit of $600,840 in 2006-07 and $726,890 in 2007-08. HECL recorded sales of $87.4 million during the 2007-08 fiscal year. The company is looking at opportunities to share its expertise with domestic and international partners in fabrication and forging and the energy sector, especially nuclear power. HECL has also signed a memorandum of understanding with Bharat Heavy Electricals Limited (BHEL) (New Delhi, India) to set up 50:50 joint-venture company to fulfill the forging and casting requirement of both companies. NTPC Limited (New Delhi) is also finalizing a memorandum of understanding with HECL whereby HECL will manage NTPC's coal and ash handling plants.

NTPC recently signed a joint-venture agreement with state-owned Nuclear Power Corporation of India (NPCIL) (Mumbai, India) to build two light-water nuclear reactors. NTPC will have 49 percent stake while NPCIL will have 51 percent. The joint venture plans to set up a 2,000-megawatt (MW) nuclear power plant initially. The investment for this plant will be about $2.9 billion-$3.3 billion. NPCIL is India's only nuclear power producer. NTPC, India's largest power-producing company, recorded a growth of 9.6 percent in the quarter ending in September 2008.

India's heavy engineering sector is seeing many public private partnerships in recent times. BHEL and GE have set up a joint venture, BHEL-GE Gas Turbine Services, which will provide after-market services for GE's gas turbine products. Indian Railways has short-listed GE Transportation, a subsidiary of General Electric, and Electro-Motive Diesel Incorporated (La Grange, Illinois) for its tender to manufacture 1,000 locomotive units. The company that wins the bid will have to enter into a 74 percent joint-venture agreement with Indian Railways. The manufacturing facility will be set up in Marora in Bihar, India. GE plans to offload 23 percent of its stake to BHEL if it wins the bid. GE will bring technological expertise while BHEL will take care of labor and logistics. GE's John F. Welsh Technology Center in Bangalore will develop the energy-efficient, environmentally friendly locomotive design.

Indian Railways is also setting up another electric locomotive factory in Madhepura in Bihar. Engineering majors like Siemens AG (Munich, Germany), Alstom and Bombardier Transportation India, a subsidiary of Bombardier Incorporated (Montreal, Canada), are in the fray. Indian Railways will have a 26 percent stake in this joint venture, which will manufacture 600 locomotive units. Larsen & Toubro Limited (L&T) (Mumbai) has signed a memorandum of understanding with Tamil Nadu Industrial Development Corporation to set up an integrated port and shipyard complex. Construction will begin by the end of 2008 and is expected to take 24 months to complete. The complex will house building facilities for defense and commercial ships, oil and gas storage facilities, heavy engineering fabrication and a re-engineering facility for defense and commercial ships. Estimated to cost $630 million, the complex will be built in Kattupalli Village in Tamil Nadu's Tiruvallur district. L&T has also signed a memorandum of understanding with the Steel Authority of India (New Delhi) to set up and manage two 800-MW captive coal-based power plants in India. State-owned Hindustan Aeronautics Limited (Bangalore) has signed an agreement with Russian aviation company Ilyushin Aviation Complex to build multirole aircrafts. The new aircrafts will take the place of the Antonov An-12 and An-32 aircrafts currently used by India's air force. The estimated cost of the project is $600 million.

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