Senior NTPC officials confirmed that they have made a proposal to pick up a majority stake against the 26 per cent stake proposed by power ministry's consultants ICICI and SBI Caps.

NJPC is setting up the Rs 7666 crore project with an equity component of Rs 3832 crore. The balance loan component is funded by the World Bank. The centre was to invest Rs 2874 crore as its 75 per cent equity contribution in the project while the state government's 25 per cent share in the equity came to Rs 958 crore.

However, the Centre has managed to invest only Rs 1878 crore and the state governmnt Rs 958 crore so far.

The consultants, in their report, have stated that a 26 per cent equity acquisition by NTPC will not only help in meeting the shortfall in equity contribution by the centre in NJPC but will also provide NTPC a valuable insight and project experience of running a hydro power project. National Tharmal Power Corporation has recently made an entry into the hydel sector.However, NTPC sources said it is not happy with a mere 26 per cent stake and has conveyed its interest for picking up a majority stake.

"We have asked for a majority stake to run the company efficiently. The Centre and the state governments will have to decide over the exact stake that can be offered to NTPC", a senior NTPC official added.

An approval from the World Bank will also have to be sought before any offloading of stake is done in favour of NTPC. The 1500 mw hydel power project being put up by NJPC is being funded by the World Bank.

NTPC's proposal assumes significance as this will not only give NTPC the ownership rights for running NJPC but will also increase the balance sheet size of NTPC for further leveraging. Many other issues which need to be sorted out before this proposal takes shape One major issue is over the high number of employees, currently undertaking the development work of the project in Himachal Pradesh.

Ministry officials said that one option could be that trained manpower of NJPC be suitably deployed for NTPC's other hydel projects on completion of NJPC's project. The project which is expected to be commissioned by the year 2002 is a joint venture between the Centre and the state government, with 75 per cent and 25 per cent holding, respectively. The project has been plagued by delays with only 58 per cent of the total cost incurred till date.

NTPC payout frozen at 1998-99 level
New Delhi, June 18: The government has frozen the dividend payable by profit making National Thermal Power Corporation at Rs 650 crore in a bid to enable the corporation to plough back all its surplus resources for expansion.

"We have allowed NTPC to pay dividend at the previous level of Rs 650 crore," power minister P R Kumaramangalam told PTI in an interview.

Asked how long the dividend would be kept frozen at the level of 1998-99 and whether Finance ministry's approval had been obtained, he said "we have done it for now... I have already taken up the matter with the Finance ministry... They have agreed."

Stating that India would require a massive investment of Rs 900,000 crore, including Rs 500,000 crore for addition of power generation capacity, to meet the target of power on demand by 2012, the minister said half the funds would have to come from the central power utilities, including NTPC.

"Finances will not be a problem... We will raise these through internal resources and market borrowings," he said.

NTPC, which paid the highest dividend by a PSU in 1998-99 at 30 per cent amounting to Rs 650 crore, had last year approached the power ministry for a freeze on payable dividend for three years and the then power secretary V K Pandit had written to finance ministry with favourable recommendations. Meanwhile, NTPC is formulating a proposal to get a 12-year freeze on dividend from the government as part of its Rs 120,000 crore investment plans, corporation sources said.

The company would send the proposal to its administrative ministry, the power ministry, in the next 15 days, they said.

NTPC has paid a over Rs 2,000 crore to exchequer as dividend in five years ended 1998-99, sources said while pointing out that another Rs 300 crore was paid to government as interim dividend for 1999-2000.

The corporation would rquire internal generation of about Rs 30,000 crore to finance the investment plans and a growing pressure of dividend over the next 12 years could obstruct the internal generation efforts, they said.

As per the corporate plan NTPC is planning an investment of Rs 1,24,881 crore to more than double its power generation capacity to 40,000 mw by 2012 for which it has ventured in hydro power sector besides setting up a joint venture with ABB-Alsthom for renovation and modernisation.

Sources said that company would continue to take up new and expansion projects at a debt equity raito of 70:30, which would necessitate internal generation of Rs 37,464 crore as the power giant is least likely to get any budgetary support. -- PRESS TRUST OF INDIA