State-run NTPC has kept aside Rs10,000 crore for acquisitions. The question is how will these acquisitions of existing power plants increase power production for NTPC and the country?
There appears to be a conflict of ideas and interest in the sense that the Power Ministry has been exploring the feasibility of consolidating all state hydro-power projects under NHPC Ltd. On the other hand, the high-level committee on energy headed by Railway Minister Suresh Prabhu has suggested that this organisation should diversify its portfolio to include hydro-power and other sources. Power Ministry, in fact, wants NTPC to concentrate on thermal units.
Set against this, NTPC CMD Arup Roy Choudhury, in a recent letter to his employees is reported to have stated that with backward integration by venturing into coal mining with the intent to enter distribution, the company hopes to become an integrated power major! At the same time, NTPC is also planning to develop the world's largest solar power project, at a single location by a single developer, with a 1,000 MW capacity in Andhra Pradesh.
But the Advisory group of Ministries of Power, Coal and Renewable Energy, in its report, has stated that the NTPC's performance, in recent years, had been affected and continues to do so due to coal shortage in the country. It may be remembered that Coal India has the ambition and responsibility to supply 1,000 million tonnes if our power needs are to be met!
This Advisory Group has felt that hydro projects in NTPC's portfolio may prove extremely useful, in the "context of the emerging market structure" in which costs plus generation tariff will get replaced by competitive pricing with higher peak-hour rates!"
Their report further states that NTPC needs to get "aggressive" on the renewable portfolio. Its present plans and projections to have a 9% growth in total capacity (in this category), by 2032, appear to be highly conservative. It further states that 10% growth in the next five years is not only achievable but that for a coal-based power generation company, it is a great opportunity to balance its project and address climate change concerns.
Press reports show that NTPC has called for bids for developing 750 MW of solar photovoltaic projects in Rajasthan, Telengana and MP, involving an outlay of about Rs6,000 crore. This is only open for domestic manufacturers. An investment of about Rs8 crore per MW is required for setting up solar PV projects and the government has shown willingness to provide financial support upto Rs1 crore per MW for setting up large solar capacities by placing the orders on domestic manufacturers.
This move will directly clash with the US whose manufacturers have raised objections to the Indian stipulation of domestic content of solar cells and modules under the Jawaharlal Nehru National Solar Mission Programme (JNNSM).
In the meantime, NTPC has plans to acquire existing "power plants" from others, as they wish to increase the generation capacity by 8,000 MW to 9,000 MW. In a recent Expression of Interest (EoI) floated by NTPC, press reports show that as many as 34 proposals offering 55,000 MW capacity has been received, from other power producers.
At the moment, NTPC has a cash reserve of Rs16,867.70 crore of which Rs10,000 crore has been set aside for such "acquisitions". They are seeking to boost their power generation capacity, to meet the growing demand, by these acquisitions.
The serious question that comes to our mind is how will these acquisitions of existing power plants is going to INCREASE the power production in the country? This only means change of ownership, and the power generated will remain practically same.
The crux of the matter, as correctly pointed out by the Advisory Group is that due to the continuous and inadequate availability of coal, power generation is suffering.
Evacuation of coal from pit heads, inadequate supplies of rakes, poor coordination is movement and non-development of underground coal mines have all added to the misery.
NTPC would do well to first concentrate on the development of its coal resources, when the mines are reallocated now and employ the most modern technique in getting the coal from these mines. If necessary, they ought to bring in foreign and more experienced coal miners to do the actual mining operations in the country. In fact, one major change that they can employ is to set up power generation plants at the coal mining sites, in selected areas. NTPC may also go in for a joint venture with the Railways and have a Coal Express specially assigned for movement of coal from their own "captive" mines so that there is uninterrupted power generation.
Other means of power generation need not be given up, and these can be on the side lines as new developments.
But the first and foremost concentration is to ensure that coal supply position is priority number one. All their power generation units must have an inventory for not less than 4-6 weeks on hand. Coordination and joint ventures with Railways, even by investments on rakes, would be a good start.
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
This is mainly because, the management or the owners of collieries tend to avoid the "cumbersome" duty of handling the labour and hand over the same to labor contractors, who fleece them. Jobless and helpless, as they are, these folks work in mines at the whim and fancy of the Labor contractor.
If we have to succeed in this Biz, first and foremost is to ensure that, in all "captive" mines, all the laborers employed become "employees" of the organization concerned. And receive ALL the benefits that one would get as an employee. This is the biggest hurdle that faces our mines today.
Union to represent the workers' interest is important and paramount. But this should come from "within" that is from actual employees who work in mines and not "affiliated" to outside parties.
Second step, let these workers' interest i.e. taking care of their families, in terms of roof over their heads, education for their children, if any, medicals and basic needs have to be met.
If any organization can provide this, their mining interests will be more than covered, and they would not have problem in production or despatch. When third party bosses, sitting in a/c chambers control them with a remote control, all troubles start at their command.
When the coal blocks are NOW reallocated, let this be the first step to take care of the miners. Simply adopting the open hearth mines and not working underground, as they used, will not help. Singareni Collieries are one classic example which still works on underground mines. There is no reason why others' cannot follow suit?
We want the easy way out. That's not going to work any more. This new government is tough and willing to relax rules to benefit the country...no more cock and bull stories would get us anywhere.
We need to perform if we have to succeed. Setting a target of 1000 million tonnes by Coal India Ltd is not to be taken as a grandoise plan but one that can and will work, if all the seven collieries controlled by them are told to perform and their CMDs given a free hand to show results. When they succeed, the government ought to reward them substantially.
In the meantime, no sudden transfers until their targets are met and evacuation of coal from their pit heads work like a military convoy movement.
Railways and Coal India must start sincere work on putting the Coal Express on track without any further delay, so that NTPC and other power generators have sufficient coal at their disposal, and not live on a hand to mouth basis!