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Rlys for autonomous power corporation

Our Bureau

NEW DELHI, May 28

THE Railway Ministry is mulling the idea of an autonomous Indian Railway Power Corporation (IRPC) as a canalising agency for procurement of power, besides raising funds for foray into the power sector.

The concept, which is at the drawing-board stage, is also intended to enable speedy execution of financially viable power procurement agreements that may be entered into with independent power producers (IPPs).

Senior officials said the pros and cons of having an independent power corporation - on the lines of the proposed Telecom Corporation - are still being debated in the light of a proposal, mooted by the National Thermal Power Corporation (NTPC), which has suggested equity participation by the Indian Railways in its power generation projects.

While there are differences of opinion within the Ministry on the formation of a separate corporation, officials contend that the basic objective is to ensure cheaper, reliable and uninterrupted power to the Railways which has been adversely impacted by high tariffs charged by the State Electricity Boards (SEBs).

Although the Minister for Railways, Ms. Mamata Bannerjee, had taken up the issue of steep power bills with the State Governments, the response has been far from encouraging. It has hence been decided that in addition to accessing 15 per cent of the unall ocated share from Central power agencies, the Railways would also enter into exclusive power purchase agreements through joint ventures, provided they are financially viable.

A reference to this decision was also made in this year's Railway budget. While no mention was made on the setting up of a power corporation, proponents of the move contend that an autonomous body would aid in speedy execution of many of the tie-ups.

However, some officials reckon that the Railways need to seriously consider only the NTPC proposal and scrutinise its financial and legal viability. The legality of the proposal is contentious since the proposed arrangement would enable Railways to avoid purchase of power directly from the SEBs. Besides, the ability of Railways to raise resources for participation in such capital intensive joint ventures with NTPC also requires examination.

The proposed arrangement is expected to improve the financial position of NTPC since it would provide the latter a creditworthy consumer consuming a committed off-take.

Currently, NTPC sells power to SEBs at an average cost of around Rs. 1.20 to Rs. 1.50 per unit. The SEBs, however, sell it to the Railways at a cost of around Rs. 5.50 per unit.

The Indian Railways is, however, not able to access direct supply from Central generating stations like NTPC since the SEB's permission is required for such an arrangement. The SEBs are against such a move since the Railways constitute a sizable proporti on of their credit-worthy and bulk consumers.