Interview with NTPC's chairman, RS Sharma

What is the update on bulk tendering for 660 mw & 800 mw units?

We had floated tenders for 11 of the 660 mw supercritical units through the bulk tendering route in October 2009. This is for nine units of NTPC and two of Damodar Valley Corporation. Due to technical reasons, one company got disqualified and we were left with only one bidder. So, we had to go for fresh tenders. Techno-commercial evaluation is scheduled for the last week of August and the awarding process will be completed by January 2011.

What has been the progress on your under-construction plants in the first quarter? Are you moving as per your target?

Yes, the construction of projects is moving ahead according to our target and we are satisfied with it.

Is any of your power plants, to be constructed this fiscal, facing a delay?

No.

Looking at your results, the cost of maintenance of power plants has gone up. Is it because of inflation or because you have faced more breakdowns?

The maintenance in this (April-June) quarter was high. Some more units have been commissioned and that is why our depreciation has gone up. But that doesn’t mean our maintenance cost per plant has gone up.

What is the update on your coal mine acquisition plans? When can we expect you to close a deal?

We are targeting coal mines very aggressively in Australia, Indonesia and Mozambique and we are working on 3-4 proposals and we are examining all of them. Regarding closing of deal, I would say that we have not set any short-term targets, but we are targeting that in this financial year. We must have some coal assets in our kitty.

Have you worked out the possible cost and the model for buying these assets? Adani Power recently acquired a coal asset with royalty paying model...

So far as the model is concerned, we are looking for equity buying model. Either we will acquire minority equity or majority equity.Regarding the price of the mines, it will depend on the reserves and the quality of the coal. Right now nothing can be said. As we come close to the deal, our merchant bankers will decide the pricing of the assets.

What is the size of the assets you are targeting?

Our requirement is 10-15 mt (million tonne) per annum or even more, so we are ready to buy any asset of the size of 50-400 mt.For us, while buying the coal assets, the critical issue is of quality and the logistics. We should be able to transport our coal at the right price.

What is you war chest for buying the coal assets?

We do balance sheet funding. Right now, we are on the lookout for the coal assets. When we come to finalisation of the deal, we will include that in our budget.

What is your coal import target for the year and how much have you already imported?

Our target for the current year is around 14 mt and we have imported around 3.5-4 mt.

There were reports that your 1,980 mw North Karanpura thermal power plant would be shifted to some other site as that is a coal bearing area?

No. Right now, no decision has been taken for shifting of our power plant.

What is your view on the controversy around go and no-go areas in coalfields? How is it going to impact the power projects?

It is impacting not only our power sector but all other sectors. We would like to develop the coal mines that have been given to us. I feel there has to be some pragmatic solution. We can’t say that we don’t want forest. We can’t say that we don’t want coal. So there has to be balance, and I am sure some balance for this would be found.

You have been given six captive coal mines. What is the progress on their development?

We are developing all the captive mines allotted to us. By March 2012, we would start production in Pakhri Barwadih (in Jharkhand).

What is your expectation from the gas utilisation policy being formulated?

We would certainly like that gas be allocated to NTPC on a priority basis to meet the requirement for expansion of our plants. We already have environment clearance for the projects and even water would not be an issue.

What is your gas requirement for future expansion?

Our requirement for future projects is 40-42 mmscmd (million metric standard cubic metres per day). Right now, we are utilising around 15 mmscmd.