NTPC feels the power sector has too many uncertainties that are preventing companies from

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achieving targets. Although everyone is aware of the problems, no one is willing to address them. Coal linkages and distribution are top issues. The company’s CMD ARUP ROY CHOUDHURY talks about NTPC’s plans and the power sector as a whole in an interview with Siddhartha P Saikia & KA Badarinath. Excerpts:

Have you earmarked more capital expenditure for next year, as the litigation over boiler contract may be resolved shortly?

For the coming financial year, we have fixed a capex of Rs 20,995 crore. Our 2012-13 projection is based on the revised target for 2011-12. Now, we are seeing the end of the tunnel (in litigation over Rs 10,000 crore boiler contract). Some decision is expected soon, as hearing is already through. The 800 mw tender is also through. We are just waiting for land. We may order (equipment) for around 3,000-4,000 mw project in the next financial year.

What is your expenditure target during the 12th five-year plan, 2012-2017?

Till 2017, we have planned investments of Rs 2.19 lakh crore. It is with a plan to become a 66,000 mw company. Out of this, 30 per cent funding would be from internal accruals. We will be able to double our capacity over the next six-seven years. This is what our target is. But again, the power sector is so vulnerable that you cannot make a safe target. We rather make an ambitious target and achieve the best out of it.

Do you think NTPC can achieve this ambitious target?

There are too many uncertainties in the power sector. Taking a commitment from the power sector is very difficult nowadays. Project delivery is no more an issue. Last year, we delivered 2,500 mw and this year it will be 4,300 mw or nearabouts. People were saying NTPC is not delivering. But the problem is, even if you want to start a project, uncertainties are too many. Now, so many fronts are open such as the land acquisition act, which is a new thing. Anywhere discussions were held for the land acquisition, things have come down to zero level.

What is achievable then?

Big question. Nobody knows. For instance, the Loharinag Pala project (600 mw hydel plant on Bhagirathi river in Uttarakhand). This should have been achievable this year. But after a major part of project is completed, the government has stopped it. After my tunnel is through and powerhouse is ready, the government gives an order to abandon the project. Now, what is going to the happen to the capacities that was going to be added this year? Nothing can be predicted in the power sector. Another is North Karampura, where everything including environment clearance is through, but the coal ministry has objections.

What do you think may be the solution to resolve these hiccups?

Unless we put everything under one head, we will not be able to get it done. I think we all know the problems, it is just that we do not want to attend to them. We are fighting for a coal regulator. The main issue in the power sector today is distribution.

Are you getting environment clearances on time?

We never had a problem with the environment ministry. Go and no-go areas was an issue with Coal India, not NTPC. There are many steps and procedures in order to get a clearance. This takes time.

Delhi would see dark nights, you said some time back. Are distribution companies clearing your dues?

Now, we are getting all the payments, including those from Delhi. You cannot bail out distribution companies every time they are in trouble. They need to have an economic model that is self-sustainable.

The coal ministry plans to auction 54 new mines. Will you participate in this auction?

At the moment, we have 5 billion tonnes of our own reserves. This will take care of one-third of our demand. Coal India gives 140 mt. Even if Coal India does not give us more, we will have plenty of supply. But there is uncertainty. New issues come up even after everything is final to start mining. The whole problem is that the federal system of governance is loosely attached. Although we say coal mines are central government assets, they are lying in some states. The state government has a big role to play.

Do you think buying power plants may be an option?

We do not mind buying power plants. If anybody approaches us, we can do that. But that is not the issue. The problem is in coal linkages and distribution. We do not have generation problem in the country.

When will you achieve financial closure for Sri Lanka and Bangladesh projects?

We will achieve financial closure for Sri Lanka (500 mw) project by October 2012. And for Bangladesh (1,320 mw) closure will be early 2013. After financial closure, we would take 36 months to commission the first unit in Sri Lanka, while about 48 months for the Bangladesh project.

Does NTPC plan to diversify more into gas-based or hydro projects?

By 2032, our plan is to get 70 per cent from coal that would be the end of 15th plan. Rest will be gas, hydro, nuclear and renewable energy resources. We shall add about 1,000 mw renewable energy capacities during the 12th plan.

Are you going ahead with the power project in Arunachal Pradesh?

We have spoken to the state government and have submitted a DFR. Nothing has come to board level till now.

siddharthasaikia@mydigitalfc.com