| Union goverment’s go-ahead to new entity.
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| The railway ministry will soon be able to drastically cut its annual electricity bill of Rs 4,300 crore, with the Union Cabinet today giving approval for setting up the Nabinagar thermal power project.
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| The Cabinet gave a green signal for establishing a joint venture company, to be called Bhartiya Rail Bijlee Co (BRBCL), between Indian Railways and National Thermal Power Corporation (NTPC). With this, the railway ministry’s long pending demand of having its own captive thermal power plant will be finally fulfiled.
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| NTPC will have 74 per cent stake in the joint venture, while the Railways will hold 26 per cent.
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| The venture will be headquartered in the National Capital Region with a seed capital of Rs 10 crore and authorised capital of Rs 1,605.75 crore. Since the project capacity will be 1,000 mw and power will be supplied to other parts of eastern India, the project will receive financial concessions given to mega projects by way of customs and excise duty exemptions.
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| The railway ministry sources said an exemption of around Rs 400 crore was expected for setting up the plant. The railway ministry officials said the first unit is expected in the next three years. The plant will have four units of 250 mw each.
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| Business Standard had reported earlier that the railway and power ministries had come out with a study paper in 2003 agreeing to look for a solution to reduce railways’ electricity bill.
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| The proposed 1,000 mw plant will fulfill the ministry’s power supply demand for the east and west regions. Significantly, it will fulfil railway ministry’s demand for cost-effective power supply to a great extent. The Railways’ annual power requirement is 2,000 mw, of which it buys 100 mw from NTPC at Rs 2.94 per unit.
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| The rest it buys from various state electricity boards at an exorbitant rate of Rs 4.25 per unit, a rate at which various industries buy power.n An investment of Rs 5,352.50 crore including interest cost during construction of Rs 624.60 crore and working capital margin of Rs 103.10 crore on mega basis will be required for setting up the plant. |
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