Bechtel Corp Weighing Telecom Services Thrust

US-based Bechtel Corporation is eyeing the Indian telecom sector for strategic equity investments in basic services.

The company, which provides project management services for Lucent for the latter's telecom projects abroad, is mulling a similar kind of tie-up with Lucent for domestic projects.

E J Reinsch, vice chairman and president Bechtel India Pvt Ltd, told Business Standard: "We are still in discussions with Lucent for a similar kind of association in India".

Lucent recently bagged a $325 million equipment order from Andhra Pradesh basic telecom licensee, Tata Teleservices Ltd. It is also in negotiations for similar orders from Reliance Telecom in Gujarat and Essar Commvision in Punjab. Lucent Technologies also has a joint venture with the Tatas for telecom equipments.

He added that traditionally Bechtel has undertaken network engineering and programme management of installation projects in the basic telecom services sector.

Reinsch also spoke of Bechtel's interest in the mining and metal sector, with primary focus on Alumina projects.

It has already bid for Indal's smelter project, as well as for Hindalco's alumina development project.

While Bechtel typically looks for a minority equity stake of 10-30 per cent in most of its investments, Reinsch stressed that, "There are no limits on our equity investment if a project is financially sound".

He pointed out that in the qualification package submitted for the Ib Valley project in Orissa, the company has decided against taking an equity stake after evaluation.

The US engineering major is also scouting for suitable projects in private sector ports, roads, water and other civil areas, where it would take an equity exposure.

"The area that we are watching is airports. I think there will be private opportunities in this area. We continue to study road projects and are looking closely at the hydro-electric market in the country for possible investments in the future" Reinsch disclosed.

Bechtel will also work in tandem with the public sector National Thermal Power Corporation (NTPC). "I believe NTPC will set up 80-90 per cent of the country's power projects in the next five years.

With its new procurement policy, in which a larger chunk of projects are being awarded on turnkey and fixed price basis, NTPC projects would be a key area of interest" he said.

Apart from working as engineering, procurement and construction (EPC) contractor for various power projects, Bechtel is also actively involved in the power generation through joint venture company Intergen, which is looking at captive and other small power projects in the country. Bechtel also supports Intergen as an EPC contractor.

Behctel is a 10 per cent equity partner of Enron, and an EPC contractor, for the first phase of the Dabhol power project.

It is also involved as programme manager for the Haldia petrochemicals project.

However, its largest area of involvement in India till date has been the multibillion dollar management contract that it won for the Reliance's Jamnagar grassroots refinery project.

"Our contract will be worth about $2.6-3 billion. In my 28 years with Bechtel, this is the most significant project for the company" he said.