NTPC to buy MP Power plant

NTPC is planning a similar deal with Jharkhand for its 770 Mw Patratu thermal power station

Thermal power giant NTPC will acquire the five-decade-old Sarni Thermal Power Station of Madhya Pradesh, causing speculation among employees of the target company. The NTPC sources have said due-diligence is underway.

Speaking to Business Standard, I C P Keshri, principal secretary, energy department said, "NTPC already has presence in Madhya Pradesh as it runs one of the largest thermal power stations -- Vindhyachal Thermal Power. It would be better to hand over the Sarni project to the company or run it as joint venture. But much will depend upon due diligence, which is being done by SBI Caps."

The first unit of 67.5 Mw of Sarni Thermal Power project, also known as Satpura Thermal Power project, came into operation in October 1967.

If the project goes to NTPC, the state government may offer existing employees a golden-handshake. Or they can be absorbed in NTPC itself or in the new power company, once it is formed. "It will depend upon the cost, cost of operation etc," an NTPC source said.

Located at Sarni town near Ghoradongri Railway station in Betul district, the power plant is one of the coal-run units of Madhya Pradesh Power Generating Company Limited. It has an installed capacity of 1,392.50 Mw. The nearby Tawa reservoir supplies water to the plant while the coal for the plant has been procured from Western Coal Fields.

NTPC also has plans to seal a similar deal with Jharkhand government for its 770-megawatt (Mw) Patratu thermal power station in Ramgarh district in Jharkhand. The plant, unlike the one in Madhya Pradesh, is run by the Jharkhand State Electricity Board. It also has plans to go for other buys from more states for a sum of Rs 10000 crore.

"A final decision will depend upon many factors including compatibility of machinery," the NTPC source said, "Power tariff would also be revised if investment is made in new machinery, employees etc."

If sources are to be believed, the PSU has received 34 proposals for various power projects with a combined capacity of 55,000 Mw. NTPC is also in process of setting up to large thermal power plants in Barethi in the economically backward region and in Gadarwara (200 Km from Bhopal). However the company has yet not been allocated coal for both the projects.