Rlys In Talks With Ntpc To Buy Power
The ministry of railways has initiated negotiations with the National Thermal Power Corporation (NTPC) to buy electricity directly for its track electrification requirements.
"We are forced to pay three to four times the industrial rates to the state electricity boards. Part of the SEB power comes from NTPC. As SEBs charge three to four times the price they pay to NTPC, we would rather buy from NTPC directly," a Rail Bhavan source said.
According to the sources, the state electricity boards had nearly trebled the rates charged to the railways over the past decade. A special rate for electric traction, lower than the rate for high tension industrial consumers, was charged till about a decade back.
The NTPC has also shown interest in supplying power directly to the railways so long as the payment is regular.
The railways spend about Rs 2,500 crores a year on electricity for traction lines. This is also the amount it would have paid a year in foreign exchange if it had not gone for electrification of part of the rail routes. At present, 13,962 km, accounting for 22 per cent of the total rail route, has been electrified.
But the rail ministry is finding it difficult to persuade the ministry of power and other sections in the government which are worried about a possible resistance from the state electricity boards.
Some state governments have already indicated that they would face financial difficulties if the railways started buying power directly from the NTPC.
"We cannot meet all our requirements from the NTPC because it will not be able to supply power in all parts of the country. We will still have to depend on the SEBs. We have no problem buying from the state electricity boards as long as they reduce the rates to the level charged from industrial high tension consumers. We do not understand why the railways have been singled out for charging higher rates when SEBs incur no additional investments for our sake," the sources said.
The issue has been further complicated by the fact that the railways and the state electricity boards have differed on the issue of payment for freight of coal moved from coal pits. The railways are now demanding advance payment for moving coal to SEBs.
The high cost of electricity is also discouraging the railways from electrifying more routes. According to its norms, a route is taken up for electrification only if it can provide a rate of return on investment of 14 per cent. The rate of return in many areas fall below 14 per cent because of the high cost of electricity.
"Most SEBs have three or four category of charges for agriculture, domestic consumers, industrial consumers and railways. They charge the lowest rates from farmers and the highest from the railways," the sources said.