State-owned Engineers India (EIL) has called off its plans to form a joint venture with Italy’s Tecnimont SpA in Abu Dhabi, said GD Goyal, director, commercial, EIL, owing to delays in getting clearances and lack of a viable number of projects.
State-owned Engineers India (EIL) has called off its plans to form a joint venture with Italy’s Tecnimont SpA in Abu Dhabi, said GD Goyal, director, commercial, EIL, owing to delays in getting clearances and lack of a viable number of projects.
EIL and Tecnimont had in June 2008 proposed the venture to execute engineering, procurement & construction contracts of over $500 million in the oil & gas, petrochemical and chemical sectors in the UAE and the rest of the Middle East.
Tecnimont, part of the Maire Tecnimont Group, was to hold 70% stake and EIL the rest.
Other than engineering, procurement & construction jobs in the oil & gas space, the entity was to offer consultancy and project management services.
“They (Tecnimont) are not prepared to go ahead with this so the (proposed) JV has been closed,” Goyal told DNA by phone from New Delhi on Monday.
The plan has faced delays, especially getting the requisite approvals from local authorities, since inception.
AK Purwaha, chairman & managing director, earlier said that he was not sure of the reasons for the same.
“We were looking for projects at the same time as seeking approvals but because of the downturn there were not many,” he said in September, adding that the company was evaluating a couple of bids at that point. Despite the slowdown, he added, there were no plans to put the JV on hold.
Three months later, he said the agreement between the companies “has not given the desired results so far.”
Tecnimont, when contacted, said the JV was not established because there were not any projects to jointly develop in the Middle East.
EIL is involved in engineering consultancy & project management services for the oil & gas and infrastructure sectors. It also does turnkey projects in the same. Tecnimont is also an EPC contractor primarily in the hydrocarbon space.
EIL has strategic alliances with several firms, including one with the Gas Authority of India to bid for projects overseas.
“There are some delays because of the turmoil (in the Middle East and North Africa). We are looking at one project each in Ghana and Egypt,” Goyal said.
As on December 31, EIL had an order backlog of about Rs8,100 crore.
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