This
time, the face-to-face was with C. P. Jain, Chairman and Chief
Executive Officer of the major player in the power sector, the
National Thermal Power Corporation. The DayAfter
Editor-in- Chief Sunil Dang and the Think Tank Director, Yogendra
Bali, asked sharp questions about the power problems in the country.
Jain answered the questions with calm and composed confidence, a
competent professional, and said that with adequate policy support he
was hopeful that NTPC could play its part in leading India from
darkness to light.
In this face-to-face, the Think Tank posed the
question which the whole country was asking: When would the era of
power shutdowns and cutdowns end and what were the hopes of seeing an
end to the continuing power crisis in the country?
He said, at present, the NTPC was providing about
20 per cent of the country’s power needs. In the 10th and the 11th
Five-Year plans, it proposed to add at least another 20,000 megawatts.
This was part of the overall power plan of the Government. He said the
NTPC’s present generation capacity was 20,000 megawatts and in another
10 years it was sought to be doubled.
The NTPC Chairman said with confidence: "We will
play our role in the overall plan of the Government." What was the
source of his confidence? His accurate assessment of the problems of
the power sector and his hard-boiled professional approach to tackling
them.
Talking about the ‘NTPC Success’, he said: "We are
well-placed so far as the physical side of the plan is concerned". The
NTPC had almost 4,800 MW under construction. There was technological
capability available for creating plans for another 11,800 MW. They
had submitted projects totalling 4,000 MW for approval. Thus, the
Corporation was gearing itself to create another 20,000 MW in addition
to its present capacity in the next 10 years.
The NTPC Chief agreed that the Corporation faced
two critical issues. One was that of collection of revenue. The
success in revenue collection was sought to be achieved through a
novel "Time-Sharing Project" in which the most important element was
"One-Time Settlement".
When it was pointed out that there were States and
State Electricity Boards like those in Uttar Pradesh, Bihar and
elsewhere which were perpetual defaulters and was he really confident
that he would manage to collect dues from them, he expressed the hope
that the One-time Settlement Project and the bonds would yield results
from there also. He said he was conscious that they did not have the
money today to pay their dues in cash. But they could pay through
these bonds, which would be encashable when they had the money in due
course. The bonds were expected to mature between the sixth and the
15th year, which was a sufficiently long period to enable them to pay
their dues. It was like getting a post-dated cheque form the defaulter
customers.
Jain’s view was that if there was a problem, a
solution had to be found for it and in that, "we have to make some
sacrifice, like waiving off 60 per cent surcharge and giving a further
21 per cent discount in surcharge on payment. There is substantial
sacrifice in this but the thing is that the payment will come from the
6th to the 15th year. He called it ultimately a "Win-Win Situation"
for the NTPC.
He agreed that the 10-year perspective plan of the
NTPC required about Rs. 100,000 crore for implementation. This money
he expected to raise partly from the NTPC’s own resources and partly
from loans. The second critical issue was linked with this question of
resource generation. Resources would be bolstered by the Corporate
Tariff Plan of NTPC which was prepared as far back as 1998..
The second issue would be solved by a Tariff
Formula which would take care of the cash flow to the company. This
formula was applicable to all at par earlier. Every generator was
guided by that formula; now the CRC has come up with separate norms
for Central Public Sector undertakings like the NTPC. "That will take
care of some of our cash flow. On these two assumptions, the NTPC
based its 40,000 MW capacity plan. It was a resources-based plan,"
said Jain.
The Regulatory Commission, however had created new
headaches for NTPC. Its guidelines had reduced the assumed cash flow
to 30 per cent of what the plan had assumed. Time escalation was not
the issue here. The problem was if you do not have the money, you will
not start. The company will not start any project unless it was sure
of its resources. With the resource generation reduced, the borrowing
capacity would also be reduced, because it depended on the company’s
repayment capacity and that capacity, again, depended upon how much
the company could earn.
Right now, the NTPC was caught in a vicious
triangle. But there were two redeeming factors. Taking advantage of
the legal process, the Corporation had gone in appeal to the High
Court. When the power sector was already short of funds, it would have
to be helped out of the situation. It was not only NTPC, the policy
would affect other investments also. Because the State would also have
to generate certain resources. What was crucially needed was strong
policy support.