Chairman opposes Singh panel recommendation to split NTPC

The state-run National Thermal Power Corporation NTPC has raised objections to the NK Singh task force8217;s recommendation on splitting ...

The state-run National Thermal Power Corporation NTPC has raised objections to the NK Singh task force8217;s recommendation on splitting it into four regional companies to bring in competition.

NTPC chairman and managing director CP Jain, in a letter sent early this week, has called for a review of its recommendation submitted to the Union power ministry and said that 8216;8216;NTPC should, in fact, be showcased as an integrated entity for others.8217;8217;

Curiously, Jain has received support from Union Minister of State for Power Jayavantiben Mehta, who has claimed that 8216;8216;the disintegration of NTPC was uncalled for and an unrealistic proposal.8217;8217;

Mehta said that NTPC, which is one of the Navratnas, has been supplying a major chunk of power to various states at a cheaper rate and it has been rated by international rating agencies as one of the professionally-run Central public sector undertakings compared to multinational companies. 8216;8216;The task force has made its recommendation, which will be circulated to various ministries for their opinion. Only after that, the Cabinet will take a final decision,8217;8217; she noted.

Power ministry sources have confirmed that Jain has sought a review of the NK Singh task force8217;s recommendation to split NTPC. However, sources said that the ministry has not yet taken any formal decision in this regard, though it is of the view that NTPC, in the present, form is a monolithic organisation and it should be split on the lines of Coal India into regional entities.

Jain has brought to the notice of Singh that NTPC has been given a mandate by the Centre for a capacity addition of 20,000 mw of the total 1 lakh megawatt to be added from various sources by 2012. NTPC would need capital investment of over Rs 90,000 crore for such a massive capacity addition. 8216;8216;NTPC has decided to raise Rs 60,000 crore through borrowings 8212;8212;bonds and loans from financial institutions. NTPC is confident of getting loans from funding agencies and also from the market in view of its cash flow and security. Splitting NTPC will affect the borrowings programme and ultimately its capacity addition,8217;8217; Jain said in his communication.

NTPC, whose turnover shot up to Rs 19,947 crore in 2002-03, has recently lined up with a loan of Rs 7,000 crore from the LIC. NTPC also proposes to raise nearly Rs 35,652 crore through internal resources, and has estimated domestic borrowings of Rs 29,336 crore and external borrowings of Rs 39,784 crore to fund the capacity addition of 20,000 mw.

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According to Jain, NTPC, in its present form, has the advantage of technical, engineering and financial expertise to push through the capacity addition in a cohesive manner. However, splitting it would make the regional entities weak and they would not be able to carry out the capacity addition.

Moreover, Jain drove home the point that the morale of NTPC8217;s workforce would be seriously affected by its disintegration. He said that NTPC has been a major generator and supplier of power at a competitive rate.