NTPC delays compound power woes

Font Size

Print

Feedback

Email

Discuss

• Discount UK Shopping

Related Articles

NPCIL, L&T JV to give nuke plans a fillipNTPC to acquire coal blocks in IndonesiaNTPC to appoint banker for S Africa buyCERC presses green pedal on T&D

New Delhi: Many key projects of public sector NTPC Ltd is running behind schedule, thanks to a tortuous decision-making process. The slackness of India’s largest power utility is adding another reason for the country to miss the target to add 78,700 mw to its generation capacity in the 11 th Five-Year Plan. The government has recently admitted to huge slippages in the Plan to build new power generation capacities.

NTPC, sources say, has deferred its Barh-I and Sipat-I projects, with a combined capacity of 4,000 mw, owing to prolonged commercial disputes with contractors. Even smaller projects of the PSU, which once prided itself on its track record in project management, are trapped in tendering delays. The case of Badarpur, Delhi, plant is illustrative. For the renovation & modernisation (R&M) of the plant, the company stalled the tendering for 17 months just for a capacity gain of 1 mw.

NTPC’s mega projects such as North Karanpura and Lara have also faced inordinate delays, though for reasons other than slow decision-making. The proposed 1980 mw North Karanpura project is delayed for difficulties in securing statutory clearances and land acquisition. Similarly, the 4000 mw Lara project is stuck on differences with the Chhattisgarh government over the state’s demand for free power.

Industry sources say NTPC placed orders with Russia’s Technopromexport (TPE) for the supply of boiler to its Barh-I project on March 14, 2005. TPE then was a Federal Unitary Enterprise. Subsequently, the Russian government, through a decree, raised its share in TPE to 100%. That led to a minor change in its name, though there was no impact on its legal status.

However, NTPC held back payment to the Russian vendor on the suspicion that the decree had changed the legal status of the vendor.

Finally, NTPC ascertained through “due diligence” that there was no substantive change in the contractor’s status. But it took too long a time to reach this conclusion. During this period, the contractor halted work pending resolution of the dispute.