Indian Railways on Thursday agreed with Adani Power Ltd for purchasing 50 MW power under its new policy of competitive bidding based procurement, dropping its practice of buying from state-owned enterprises. The new procurement policy, along with captive generating capacity and investments in transmission lines is expected translate into cost savings of nearly 25% for the national carrier in a few years.
Railway officials said initiatives like migrating to competitive bidding, setting up own captive power plants and transmission network is going to help the national transporter save close to Rs 270 crore this fiscal year and Rs 3,500 crore in the next three to four years.
“Our peak energy requirement comes around 4,000 MW with base load of 3,000 MW. If you add up all the recent power purchase agreements and our captive power plant at Nabinagar which will start generating 1000 MW from March 2017, the procurement comes up to 2185 MW,” a railway official said.
“More than half of our energy requirement will be met by these measures.” he added. Indian Railways until recently had been procuring power from state owned discoms at an average rate of Rs. 6.75 per unit.
The national transporter has tied up with Ratnagiri Gas and Power Ltd (RGPPL), for procuring 500 MW at Rs 4.70 per unit, and in addition has floated a tender for 585 MW power for various states on behalf of Zonal Railways, for which 44 bids have been received.
According to the bilateral arrangement on earlier this year between the IR and Damodar Valley Corporation (DVC), DVC will supply power to the IR at Rs 4 per unit, while Adani Power will supply power at Rs 3.69 per unit. “We are also in talks with discoms to reduce their tariff charges as a result of which Maharashtra and Madhya Pradesh have already reduced their tariff.” the official said. “Maharashtra has brought down the price from Rs 9.50 to 8.50 per unit and Madhya Pradesh has reduced it from Rs 6.40 to Rs 6.10 per unit.” he added.
Officials said the agreement to procure power from RGPPL was temporarily on hold as Central Electricity Regulatory Commission (CERC) still has to address the issues raised by Maharashtra state to grant of open access as deemed licensee to the Indian Railways. Maharashtra government had filed a petition with CERC and the order is expected by the end of this month.
Indian Railways energy consumption for the last fiscal year was around 17.5 billion units costing the national transporter a whopping Rs 12,322 crore, making it the second biggest expense for the national transporter after its wage bills. With an expected increase of 5-8% energy demand for the Railways, officials say that these would trim the expenditure.