In an interview with The Financial Express, Singh talked about the strategies he has adopted in expanding the operations of NTPC and also on his future plans for the company.

NTPC has emerged as a front runner in the power sector. What are your future plans and strategies for the company?

NTPC would continue to maintain its dominant share in the Indian power industry by increasing itsinstalled capacity. The aim is to be come a 30,000 mw plus company by 2007 and a 40,000 mw company by 2012. Currently, we are focusing on our plans till 2007, as huge investments to the tune of $ 14 billion (Rs 56,000 crore ) are required to achieve these capacity targets. In the long run, NTPC would strive to be one of the top ten utilities in the world in terms of installed capacity and among the first five in thermal generation.

Meanwhile, the company has also diversified into hydro and other renewables, has set up a R&M joint venture with ABB. We are also looking into the possibilities of O&M contracts besides providing consultancy services in a big way.

What are you doing to improve the receivables position of the company from the state electricity boards (SEBs)?

We have chalked out a series of measures to improve the receivables position including a special incentive schemes for the SEBs to encourage payments through LC by giving them a 2.5 per cent rebate. The billing has more thantrebled from Rs 3854 crore to Rs 12,473 crore in the past six years.

The realisation has shown substantial improvement. The LC coverage which stood at Rs 115 crore (40.2%) in 1991-92 against a monthly sales of Rs 286 crore went up to Rs 973 crore (97.17%) of current billing against a much higher monthly sales of Rs 1002 crore in 1997-98.

The total outstandings with the SEBs still stand at an whopping Rs 8921.82 crore and we are adopting aggressive ways to recover our dues from the electricity boards by restricting power supplies to the erring states.

What are the new projects planned by NTPC?

Projects worth 3200 mw are under construction including 1000 mw Vindhyachal-II, 1000 mw Simadhari, 420 mw Unchahar-II, 350 mw Kayamkulam and 430 mw Faridabad power project. In addition to these projects, 5000 mw capacity are under bidding. These includes the 2000 mw Talcher-II, 500 mw Rmagundam-III and another 2600 mw capacity is planned through the second phase extension of Anta, Auraiya, Kawas andGandhar.

Besides these projects NTPC and Damodar Valley Corporation (DVC) have also been entrusted with the responsibility of taking up a host of mega power projects including the 1500 mw Kahalgaon stage-II, 2000 mw North Karanpura STPP, 2000 mw Barh STPP, 1000 mw Maithon project and 1500 mw Cheyyur project.

You have said that investments to the tune of $14 billion would be required for achieving capacity addition targets till 2007. How do you plan to manage such high level of investments and what are your financial strategies in this regard?

NTPC has worked out a multi-pronged strategy to manage these levels of investments. This includes reducing of the project costs, i.e reducing the fixed cost per mega watt and also by reducing the project implementation time. Until now NTPC was using debt equity ratio of 1:1 to finance its projects but with the recent government policy a maximum debt-equity ratio of 4 :1 is allowed and so in order to leverage its internal resources for larger capacityaddition, the corporation would implement all new projects with a debt-equity ratio of 70:30.

Based on the projections of profit for the ten year period ending March 2007, the debt servicing obligations of NTPC can be met without any difficulty. The debt service coverage ratio during this period ranges from 1.86 to 2.47 after considering the new loans to be contracted during the period and repayment obligation arising out of the same.

In order to raise debts, NTPC would approach foreign capital markets directly besides continuing assistance from multilateral funding agencies like the world bank, ADB, OECF and KfW. NTPC will also raise resources from the domestic debt market through innovative borrowing instruments. Other strategies include acquiring assets on lease and co-financing along with World Bank and ADB.

What are your plans for sourcing LNG for your forthcoming projects?

Talks are on with Petronet LNG for a favourable equity participation by NTPC. However no firm decision has been takenin this regard as yet.

Meanwhile, NTPC has appointed Crisil to assist it in sourcing LNG from various alternative sources including the international competitive bidding. Since NTPC will be the biggest consumer of LNG for its power plans, we are also planning to invest in re-gassification terminals.