New Delhi: The government has decided to reallocate the three captive coal blocks that were taken away from state-run NTPC Ltd, India’s largest power generator.
Power minister Jyotiraditya Scindia told reporters the blocks will be reallocated to NTPC by Tuesday after the approval of the law ministry.
He was speaking after a meeting on the issue called by finance minister P. Chidambaram, which was attended by representatives of the ministries of power and coal and the Planning Commission, among others.
NTPC was allocated eight coal blocks by the government. But apart from Pakri Barwadih, it was left only with Talaipalli and Dulanga as the Kerandari, Chatti Bariatu and Chatti Bariatu (South) blocks were taken away by the coal ministry.
“We are awaiting the notification to be issued. This removes a major impediment for our growth, which is fuel,” said a senior NTPC executive requesting anonymity.
India’s largest power generator on Monday said net profit for the quarter ended 31 December rose 22% from a year earlier as it benefited from higher sales, lower fuel costs and reduced payouts towards employee benefits.
Net profit rose to Rs.2,596.76 crore from Rs.2,130.39 crore a year ago. Revenue rose 1.70% to Rs.15,807.56 crore. For the nine months ended 31 December, profit rose 24.24% to Rs.8,237.78 crore.
“Our fuel bills have come down as we have shifted to gross calorific value (GCV) based billing,” said an NTPC executive, requesting anonymity.
Coal India Ltd shifted to a new pricing mechanism based on GCV at the beginning of the year. According to the system, prices are linked to the calorific value, or quality, of coal. NTPC has been deducting money from the fuel bills raised by the coal miner on grounds that it has been supplied low-grade coal.
“The company has been making payment towards supply of coal considering the GCV (gross calorific value) based pricing w.e.f. (with effect from) 1 January 2012. Accordingly, the amount payable/recoverable to/from the coal companies based on GCV-based pricing of coal has been accounted with corresponding billing to the beneficiaries,” NTPC said in its results.
NTPC has been unable to operationalize its captive coal blocks. The utility says it is confident of starting production from its blocks shortly, but the plans have been delayed. The block allotted to it at Pakri Barwadih in Jharkhand, with gross coal reserves of 1,350 million tonnes (mt), is yet to yield results. NTPC had planned to start mining from the block by end-2007.
NTPC is capable of generating 39,674 megawatts (MW) of electricity with 16 coal-fuelled projects. The country’s largest power producer and coal consumer, the company has an annual coal requirement of 160 mt, of which it will have to import around 16 mt. The balance comes from supplies from miners such as Coal India and Singareni Collieries Co. Ltd.
The government, which has an 84.5% stake in the company, plans to sell 9.5% in NTPC to help meet its target of raising Rs.30,000 crore from asset divestments in the current fiscal year. The Congress-led United Progressive Alliance government plans to raise some Rs.13,000 crore from the sale of 783.3 million shares in NTPC.
JP Morgan Asia Pacific Equity Research, in an 11 January report, said, “We stay ‘neutral’ ahead of the imminent disinvestment of 9.5% stake, which has contributed to the stock’s recent underperformance. Further delays in securing land issues for 13th Plan projects (e.g. Darilipalli, Gajmara) and captive mines are a downside risk, as they affect terminal value.”
NTPC posted a net profit of Rs.9,224 crore on revenue of Rs.64,830 crore for the year ended March 2012. It had a cash surplus of Rs.17,000 crore at the end of the fiscal year.
On Monday, NTPC fell 1.46% to Rs.161.75 on BSE Ltd. The benchmark Sensex index rose 0.31% to 20,101.82 points at close.