NTPC expects to cut Chhabra losses by a-fifth

Country's largest power producer NTPC expects to cut losses from Chhabra power station that it acquired last week to one-fifth by saving on interest outgo and raising operational efficiency. The company is on lookout for more state-run stressed assets for buyouts, sources said.The tariff of the project is expected to come down by Rs 0.05 a unit to Rs 3.84/unit.

NTPC Last Thursday announced acquisition of 1000-mw power plant owned by state generating company of Rajasthan. It signed an agreement with Rajasthan Vidyut Nigam to acquire 1000-mw operational stage I of the power plant and 1320-mw stage II of the project that is under construction.

In October last year, Rajasthan Electricity Regulatory Commission approved cost of stage-I of the project at Rs 5053 crore. After depreciation, Stage I of the project has been valued at Rs 3,900 crore, of which the debt portion is at Rs 3200 crore and equity at Rs 700 crore.

Stage I of the power station comprises of four sub-critical technology based units of 250-mw each operating at highly inefficient parameters. At an interest outgo as high as at 10.75%, the plant was losing Rs 295 crore annually.

With NTPC takeover the heat rate-- heat generated per calorie of coal burnt -- expected to come down to 2400 kcal/Kwh. Coupled with low-cost funding advantage at 8%, NTPC is confident of narrowing losses to Rs 66 crore a year once it starts generating electricity from the project. NTPC is expected to complete the acquisition of stage-I next month.

NTPC will provide project management services to Rajasthan generation co mpany for expeditious completion of stage II of the project. The cost of the second stage of the project of two units of 660-mw each is estimated to have risen due to delay to Rs 9750 crore comprising 80% debt and 20% equity. The first unit of 660-mw of the second stage is expected to be commissioned by next month and second unit by June next year.