Time to wind up Damodar Valley Corp, asks NTPC chief

NTPC Chairman Arup Roy Choudhury, who took over the additional charge of Chairman and Managing Director of Damodar Valley Corp (DVC) last month, has asked the Union power ministry whether it is time to wind up the operations of the Kolkata-based power generator.

DVC is a joint venture between the West Bengal and Jharkhand governments and the Centre. It operates nine power plants, with a cumulative capacity of 5,857 megawatts (Mw).

Referring to the company’s operational issues, the NTPC chief said, “A total paradigm shift is required if DVC has to survive.”

Choudhury raised questions over the relevance of the philosophy behind the creation of DVC in current times. DVC was floated in 1943, under a special Act to utilise the flow of the Damodar river’s waters through West Bengal and Bihar, for power generation and irrigation projects.

The NTPC chairman blamed the company’s past management for ill-planned expansion without first securing land, water, environmental clearance, coal linkage and power purchase arrangements that led to stuck projects.

He notes DVC had current arrears of Rs 6,880 crore, mostly from Jharkhand; negative cash flow of Rs 110 crore a month; and no recovery of even fixed costs of 1,100-Mw capacity due to lack of power sale pacts. Choudhury also said the high tariff from new power plants would make them lose out in merit order dispatch – the cheapest power gets scheduled first.