New Delhi, Dec. 24: The government has decided in favour of Bharat Heavy Electricals Ltd taking over the ailing Bharat Pumps and Compressors. The Oil and Natural Gas Corporation (ONGC) will chip in with equity support. Engineers India (EIL) will provide technical expertise. This marks a consortium approach by the government to revive sick companies.

A senior official told The Telegraph that Bhel will hold a majority stake in the company, while ONGC will pump in some funds. EIL will not be expected to put in money but will assist Bhel with technical knowhow to turn the sick company around. Heavy industries minister Santosh Mohan Dev said this approach of asking strong public sector firms to acquire ailing government-owned companies would be followed in other cases as well.

While the SAIL takeover of IISCO was on the same lines, the steel company would also be asked to look at the ailing Bharat Refractories.

The decision was in favour of Bhel as the petroleum ministry held that ONGC was not keen to acquire the company.

According to sources, the petroleum ministry has pointed out that there is no synergy between the two companies as ONGC accounts for only 5 per cent of the orders of Bharat Pumps and Compressors.

“While ONGC is an upstream oil exploration and production company, Bharat Pumps and Compressors is an engineering company. If a bigger public sector enterprise has to acquire it, Bhel, which is also an engineering company under the administrative control of the department of heavy industries, is better suited for the purpose than an oil company,” an official said.

The ministry had said even downstream oil companies such as Indian Oil Corporation and Bharat Petroleum pick up a larger share of the products of Allahabad-based Bharat Pumps and Compressors.