Active Stocks
Thu Mar 28 2024 13:29:23
  1. Tata Steel share price
  2. 155.35 1.64%
  1. HDFC Bank share price
  2. 1,453.65 0.90%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
  1. ITC share price
  2. 429.45 0.34%
  1. State Bank Of India share price
  2. 754.85 2.83%
Business News/ Companies / Important decisions await NTPC’s board approval
BackBack

Important decisions await NTPC’s board approval

The contract for developing and operating NTPC's $5.5 billion Pakri-Barwadih captive coal block in Jharkhand is pending approval

“The Thriveni Earthmovers Pvt. and Sainik Mining JV has been shortlisted but the contract was not awarded due to the reluctance of the former CMD to take any big decisions at the end of his tenure,” said a senior NTPC executive, requesting anonymity. Premium
“The Thriveni Earthmovers Pvt. and Sainik Mining JV has been shortlisted but the contract was not awarded due to the reluctance of the former CMD to take any big decisions at the end of his tenure,” said a senior NTPC executive, requesting anonymity.

New Delhi: With former chairman and managing director of state-owned NTPC Ltd Arup Roy Choudhury desisting from taking any important decisions at the end of his term, many believe a flurry of approvals is imminent.

A case in point is the contract for developing and operating the firm’s $5.5 billion Pakri-Barwadih captive coal block in Jharkhand, a project that’s vital for the fuel security of India’s largest power producer. While a joint venture (JV) of Thriveni Earthmovers Pvt. and Sainik Mining was shortlisted for the 23,000 crore contract—making it the largest such contract in India—the proposal for award of the contract was twice returned from NTPC’s board.

“The Thriveni Earthmovers Pvt. and Sainik Mining JV has been shortlisted but the contract was not awarded due to the reluctance of the former CMD to take any big decisions at the end of his tenure," said a senior NTPC executive, requesting anonymity.

The contract for mine developer and operator (MDO) has been controversial. NTPC, which requires 167.4 million tonnes (mt) of coal a year to operate its power projects, called for international competitive bids after it cancelled a contract earlier awarded to Thiess Minecs India Pvt. Ltd, a joint venture between Australia-based Thiess Pty. Ltd and Kolkata-based Minecs Finvest Pvt. Ltd. NTPC said it had decided to terminate the contract on 13 May after Thiess Minecs failed to make any progress in developing the mine. The issue is under arbitration.

The Pakri-Barwadih block was also the centre of a tussle between NTPC and Yogendra Saw, former agriculture minister in the Jharkhand government, over the utility’s inability to mine coal from the block, which was part of Saw’s Barkagaon constituency in Jharkhand.

NTPC has alleged that Saw was responsible for the illegal extraction and sale of coal from the Pakri-Barwadih block. Saw denied the allegations.

Choudhury’s term ended on 31 August. A.K. Jha, director, technical, has assumed interim charge of chairman and managing director at NTPC. Jha, widely respected within and outside the organization, also holds the charge of director commercial at NTPC. He took over from Inder Jit Kapoor, who joined the Appellate Tribunal for Electricity (Aptel) as its technical member last month.

Jha’s term as NTPC chief is for a period of three months or till the time a successor is chosen or until further orders are received. The Appointments Committee of the Cabinet (ACC) recommended recourse to the search-cum-selection committee (SCSC) rather than following the Public Enterprises Selection Board (PESB) model, under which the appointment process typically takes a year or so to complete.

While spokespersons of Thriveni Earthmovers Pvt. and Sainik Mining couldn’t be immediately contacted, a NTPC spokesperson didn’t immediately respond to email queries.

In a presentation made at investors’ meet in Mumbai on 3 August, the utility said, “Fresh MDO to be appointed in the current FY (financial year)," for the Pakri-Barwadih block.

With an installed capacity of 45,048MW, of which around 85% is fuelled by coal, NTPC is India’s largest power utility. It plans to be a 128,000-MW firm by 2032, of which 72% will be generated by fossil fuels. NTPC had earlier planned to start mining from the block, awarded in October 2004, by end-2007. The utility has spent 1,082 crore on the project. Along with the Pakri-Barwadih coal block, NTPC has seven other mines with total geological reserves of five billion tones (bt) and a production potential of 82 million tonnes per annum (mtpa).

India has set itself an ambitious target of increasing coal production from 565.77 million tonnes in 2013-14 to 1.5 billion tonnes by 2020 to reduce dependence on imports. The country mined 532 mt of coal in 2009-10, 533 mt in 2010-11 and 540 mt in 2011-12. Production was 557 mt in 2012-13 and 564 mt in 2013-14.

Analysts believe that India’s demand for coal is growing.

“Coal consumption in India, particularly in the electric power sector, is outpacing India’s domestic production. From 2005 to 2012, India’s coal production grew by only 4.7% per year to about 600 million metric tons, while the country’s coal-fired electric power capacity grew by a much faster rate (about 9.4% per year), reaching 150 gigawatts. To help resolve the shortfall in coal supply and to support expanded coal-fired generation, India has set a coal production target of 1.5 billion metric tons by 2020. Recent shifts in government policies and practices may play a key role in India’s ability to meet this coal production goal," the US Energy Information Administration (EIA) said in a 25 August statement.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

ABOUT THE AUTHOR
Utpal Bhaskar
"Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 02 Sep 2015, 12:23 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie