The Union government will have to amend the Atomic Energy Act, 1962, to divest its stakes in the Nuclear Power Corporation (NPC) which is engaged in increasing its capacity addition to 63,000 Mw by 2032 from the present 4,780 Mw. The state-owned entity’s authorised capital is Rs 15,000 crore, while the share capital is worth Rs 10,000 crore.
According to the Atomic Energy Act, 1962, a government company is one where the central government holds not less than 51 per cent of the paid-up share capital. The government “shall have the power to produce, develop, use and dispose of atomic energy either by itself or through any authority or corporation established by it or a government company and carry out research into any matters connected therewith”.
NPC is under the government radar for disinvestment owing to its strong balance sheet. The 1987-founded corporation’s total assets are worth Rs 41,894 crore, while fixed assets are of the order of Rs 29,587 crore. Its networth is Rs 22,162 crore as on March 31, 2011. NPC’s net is reported at Rs 1,376 crore during 2010-11 — and it is expected to surge to Rs 2,000 crore during 2011-12.
An NPC official notes that the company tops the list of 29 public sector undertakings shortlisted by the Prime Minister’s Economic Advisory Council for disinvestment. “However, it does not figure in the current year’s budget proposals presented by finance minister.
The government is quite aware that the disinvestment will be possible only after amendments to the Atomic Energy Act, 1962,” he told Business Standard. “In the present avatar, NPC is a government-owned company established with a special purpose of nuclear power generation. The government, after amendment, can initially divest up to 10 per cent.”
The official informs that the government can simultaneously consider allowing the private sector to pick up to 49 per cent in NPC, which would continue to hold 51 per cent shares. “Several private sector companies have so far evinced interest to form joint venture. However, GMR has formally written to the central government in this regard,” he adds.
“Till the government allows private-sector participation through a JV (joint venture) route, NPC will continue to join hands with several PSUs to pursue capacity addition,” he adds. They include Bharat Heavy Electricals, NTPC, Indian Oil Corporation and National Aluminium Company Ltd.