Roy Choudhury to take over as NTPC chief

Arup Roy Choudhury is set to take over as new NTPC chairman on Wednesday. He is credited with turning around National Buildings Construction Corporation. His task will be to rebuild NTPC's reputation which has taken a beating in recent years. The public sector company is facing serious challenges in expediting the pace of capacity addition, raising question mark on the power ministry's ability to meet its 11th plan capacity addition target. For example, NTPC has added only 4,200 mw against its envisaged 17,000-mw target for the 11th Plan.

There is no denying that acquiring land and securing environmental clearance is becoming increasingly difficult for power projects. NTPC is also facing the same difficulties. However, some of its problems have more to do with company's own decision making than external challenges. NTPC's failure to act on time has cost it heavily in terms of project delays and unnecessary obligations on escalation charges to contractors. Barh-I is a case in point where NTPC is expected to cough up additional Rs 900-1,000 crore in escalation charges to its Russian contractor, which is about half of the original contract price. Besides, the project is also running far behind its schedule, impacting the government's capacity addition plan. The government launched ultra mega power project (UMPP) scheme in 2006 to expedite power generation capacity addition programme. NTPC was supposed to be a strong contender for these projects. The government bid out four UMPPs but NTPC could not bag even one.

What is more, NTPC came at eight position in the bidding race for the Sasan, which was the first UMPP to be taken up for bidding. In NTPC's history, company's top job has always been held by insiders. This is the first time an outsider has been selected for the top post in India's largest power generating company.