Plan Panel Opposes Independent Power Producer Status For Ntpc
A Union power ministry-piloted proposal to extend independent power producer status to the National Thermal Power Corporation (NTPC), which is in violation of the guidelines laid down by the National Development Council, is poised to put the Centre in direct confrontation with the states.
Not surprisingly, therefore, the Planning Commission has ranged itself against the proposal. The move, which is to be discussed by the committee of secretaries before being put up to the cabinet, envisages that NTPC be selectively permitted to install power plants and limit the power generated from it for exclusive use of the state where it is set up.
Since NTPC will not be creating separate companies for these projects, it would mean that the resources (part of which accrued from the budget and by way of external aid from the World Bank and Overseas Economic Cooperation Fund) will be realised from the existing fund base of the central public sector undertaking, while the power generated from the unit would be reserved exclusively for the respective states.
The power ministry proposal has been put up in the context of two projects of 1,000 mega watts (mw) each, proposed by NTPC (as an independent power producer) in Simhadiri in Andhra Pradesh and Faridabad in Haryana.
This will be in direct contrast to the existing practice wherein any unit set up by NTPC operates as a regional power station and evacuates power to several states in the area. Senior power ministry officials pointed out that the arrangement sought by National Thermal Power Corporation for these two projects would not be feasible as per its existing memorandum of understanding with the power ministry. Hence, the bid to obtain cabinet approval.
The officials sought to explain the rationale behind the move on the grounds that NTPC would be able to effect more reasonable tariffs and could thrash out a more advantageous power purchase agreement for itself.
However, other government wings have strongly opposed the move on the grounds that it would be unfair to other states.
NTPC receives external aid, the exchange risk for which is being borne by the Centre. And it is a central public sector undertaking. The only way out is if it floats a separate venture to manage such ventures, said a senior government official.