 "Arup Roy Choudhury")
With generation capacity of about 43,000 Mw, NTPC has been at the fore of all government programmes related to power. Chairman and Managing Director Arup Roy Choudhury, in an interview with Jyoti Mukul and Shreya Jai, says the shift of the government's focus from generation to transmission & distribution is a positive. Edited excerpts:
The National Democratic Alliance (NDA) government's maiden Budget has announced the Deendayal Upadhyaya Gram Jyoti Yojana for feeder separation, on the lines of the Gujarat model. Do you think it will work, considering state governments have to be taken on board for this?
They will have to structure the scheme in such a fashion that the money isn't subsumed in the deficits of state governments. Now that transmission is privatised, I think a lot of private entities will be interested, if they are assured of returns. This is a good initiative. What the Budget has provided is a token amount that will go a long way in attracting banks, financial institutions and the private sector to participate in something like this. At least there is a shift from generation to transmission & distribution, which is required.
By and large, generation is doing well in our country, except some units that have become stranded, primarily because of bad business decisions. There have been many bad decisions, be it at the lender's end or the promoter's. Now, the government is keen to put these in the mainstream. These are national assets that can be used. There is no point in promoters and financial institutions crying foul. It's better to take a shave, reduce exposure and return to a situation in which these assets start performing.
NTPC had sought bids to buy power plants. What kind of capacity are you eyeing through this route? Have you finalised the projects?
Expressions of interest have come from 32 companies. We won't buy simply because the private sector wants to free its balance sheet. We will buy only if we find a profitable plant. There is no desperation to acquire. We are growing - some 22,000 Mw is under construction and we have started work on 11,000 Mw.
What criterion will you adopt?
Due-diligence is on. We will look at only coal plants that have required linkages in place.
What do you expect from the government on the gas front?
There is a certain amount of gas-based power capacity in the country. The government has to decide on when the gas will be available, how it will work, what policy changes are required and how the gas will be priced - will we get gas at international prices?
The new government has revived a proposal for gas-pooling. Do you think this will help?
Pooling has to be cost-neutral. Someone has to pay more; someone has to pay less. But why should the one paying more agree? There is no logic. Pooling can be done only when cheap gas is available. If we will get domestic gas at international prices, what will we pool it with? Pooling is a misconceived idea. Besides, are our gas producers ready to sell gas at cheaper rates?
There is an increase in the cess on coal. What is the impact on NTPC?
It is a pass-through for us. But the cost of power will rise 3.5 paise a unit.
The NDA government plans to continue distribution reforms through the financial restructuring package announced by the United Progressive Alliance government. Do you see any benefits?
So far, we have no payment outstanding. I don't see a risk that they won't be able to pay. But I would say along with transmission, distribution reforms are also required. The government's vision is there should be 24x7 power. Strengthening of the distribution network, provisioning against thefts and losses, proper metering - these are the kind of reforms I want. Each state will have its own model. Some are already doing fairly well.
Though rates have been revised in nearly all states through the past few years, consumers have resisted such rises. Do you think the cost of power can be reduced?
Every state has transmission & distribution losses. The national average is 27 per cent, which means one in four units of electricity is stolen or lost. Around 25 per cent tariff, therefore, can be reduced. The task is not that simple, but there is scope to avoid the increase by conserving more power.
