We are planning to add 15,000 Mw by 2020-22: A R Ansari

Interview with CMD, Neyveli Lignite Corporation

A R Ansari of Neyveli Lignite Corporation (NLC) was the face of the company since 2008, and served as its chairman and managing director. After 14 years of service in the Corporation, he retired on June 30. In his interview with T E Narasimhan a day before his retirement, Ansari recalled his experience and milestones achieved during his tenure, and the way forward for NLC. Since 2008, NLC grew at an average 15 per cent in production and 32 per cent in net worth, has diversified into solar and thermal power and received the Navratna status. Edited excerpts:

Labour problem is one issue, which is yet to be resolved. Why?
It was one of the biggest challenges I faced during my tenure. The employees are intelligent and dedicated. But the problem is they are not guided properly. Handling around 30,000 people at one single location is not an easy task. Despite the unrest, the company reported good performance purely because of employees' efforts.

The average plant load factor (PLF) was around 84 per cent. A coal-based power station's PLF is always five per cent higher, according to CERC norms. We are lignite, a low-heat-value coal. We are supposed to give only 80 per cent according to norms, but there also we have produced beyond 83-84 per cent PLF. So, that is the credit NLC wants to take because the employees have improved their performance, including the machine performance.

What are the other challenges you faced during your tenure?
In December 2008, when I took charge, the company was in very bad shape, since there was no CMD and the government did not nominate one. This had an impact on productivity and transparency.

As director-P&P, the first step was automation and computerisation across all departments, including purchasing, which was made online. Even attendance was computerised. It took four years to make the entire structure transparent with the help of automation.

The other major challenge was diversification. NLC was constituted as a power producer based on lignite. People had reservations about diversifying. After a huge effort, we have now diversified into coal, solar and wind energy.

Tell us about NLC's expansion plans.
Our original capacity is 2,490 megawatts (Mw). Now, we have added 250 Mw from Rajasthan. It becomes 2,740 Mw. We are also contemplating to add another 500 Mw - 2x250 Mw to this capacity. With this, it will go to around 3,200 Mw by the end of this financial year.

Besides this, we are planning to add 15,000 Mw of power by 2020-22 at an investment of around Rs 90,000 crore.

How it will be funded?
Being a Navratna company we have to pump 30 per cent of the project cost as equity. For now, we have a reserve of Rs 6,000 crore and in the next 10 years Rs 30,000 crore will be infused as equity from our own reserves. The rest will be funded through debt.

Could you take us through your fiscal 2013 guidance? What are you expecting, going ahead?
We are going to improve our efficiency further. We have laid the foundation to grow suitably next year, compared to this year. Our estimate is 10 per cent growth every year in turnover and around 10-15 per cent in profit.

Profit will grow by way of physical performance and through miscellaneous income. This, in turn, will increase shareholder value.