Railways ropes in NTPC to save money on power

Moving towards curtailing annual expenses of around Rs 400-600 crore incurred on purchasing electricity from state...

Moving towards curtailing annual expenses of around Rs 400-600 crore incurred on purchasing electricity from state electricity boards at exorbitant tariffs, Indian Railways is all set to enter into a joint venture agreement with National Thermal Power Corporation (NTPC) to set up a 1,000 MW captive power plant at Nabinagar in Bihar’s Aurangabad district at a cost of Rs 5,352 crore.

The JV agreement between Railways and the Power Ministry is slated to be inked on November 6 in the presence of Railway Minister Lalu Prasad Yadav and Power Minister Sushilkumar Shinde. Christened the Bharatiya Rail Bijlee Company, the power plant would be spread over an area of 1,700 acres and would be set up within four years. NTPC and Railways would hold 74 per cent and 26 per cent equity respectively in the project.

Railways currently have 17,907 km of tracks under electric traction and require an average of 2,000 MW of electricity. As of now, the average cost of electricity bought by Railways is Rs 4.28 per unit. Once this plant becomes operational, the average levelised cost of generation would be Rs 2.13 per unit. After paying the wheeling and transmission charges, Railways estimate that their traction tariff would work out between Rs 3.38 and Rs 3.63 per unit, leading to savings worth Rs 400-600 crore per annum and reducing its operating expenses by 1-2 per cent in the process.

During 2006-7, Railways total electricity bill was Rs 5,707 crore with a consumption of 13.33 billion units of electricity, out of which 11.03 billion units were used for traction purposes. Around 63 per cent of Railways’ goods traffic and 48 per cent of its passenger traffic currently operate on electrified routes.

Officials in Rail Bhavan said for the power purchased from state electricity boards, Railways have to pay exorbitant rates. At times, these rates are 2-3 times more than the rate at which state electricity boards purchase power from Central generating agencies like NTPC.