The Hindu : DVC's revamp plan

Online edition of India's National Newspaper
Friday, Apr 19, 2002

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Business

DVC's revamp plan

By Our Staff Reporter

KOLKATA APRIL 18. Damodar Valley Corporation (DVC) is planning to convert its power stations into separate profit centres and bring power generation and distribution under two strategic business units (SBU). The contemplated restructuring, though in line with the ensuing power sector reforms, is not governed by the same as the corporation enjoys special status under DVC Act.

The corporation has also undertaken an ambitious plan to add 6210 MW thermal capacity at an investment of Rs. 26,000 crores during the Tenth Plan. The ten outdated generating units out of a total of 17 will be renovated and modernised at an estimated cost of Rs. 1,364 crores adding 1092 MW to the corporation's present generation of about 1100-1200 MW. The R & M is expected to give a big push to DVC's existing plant load factor of merely 35 per cent.

Addressing a press conference here today, chairman J. C. Jetli, said though best located for generating cheap pit head thermal power, the corporation had for long overlooked the enormous possibilities to capitalise the same. "As per the present policy, it would be cheaper to import power for the States located in non-coal producing zones. We have decided to capitalise on that".

DVC had already floated two joint ventures, Maithon Project Ltd (MPL) and Bokaro Power Supply Co. Ltd (BPSCL), with BSES and SAIL respectively. MPL is now developing 1000 MW Maithon Left Bank. According to Mr. Jetli the company has also agreed in principle to develop the proposed 1000 MW Maithon Left Bank project. BPSCL had acquired 302 MW captive power plant of Bokaro steel plant of SAIL which is expected to be extended by another 500 MW in the Tenth Plan.

Underlining that such huge investment would not jeopardise the future of DVC, he said of the total requirement of Rs. 26,000 crores, 56 per cent would be financed through suppliers' deferred credit or joint venture route; 15 per cent would come from internal generation of DVC and the balance would be financed through the issue of bonds and borrowings from banks and FIs. To this effect, the corporation had already undertaken a programme to issue bonds worth Rs. 300 crores every year beginning 2002.

No hike in power tariff

Amidst widespread demands from other power generating organisations in the State to increase power tariff, DVC had taken a conscious decision not to raise its tariff in the next one and a half years.

The corporation had not increased its tariff for the last one and a half years. This is in spite of the fact that under the DVC Act the corporation enjoys a special status to fix its tariff. Also, its present tariff of Rs. 2.90 per unit is the lowest charged from the industrial sector in the State and the region.

According to the provisional estimates, DVC had registered a net profit of Rs. 190 crores during the last fiscal.

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