×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Govt loosens purse strings to aid NTPC’s shopping plans

Govt loosens purse strings to aid NTPC’s shopping plans
Comment E-mail Print Share
First Published: Fri, Mar 28 2008. 01 28 AM IST

Updated: Fri, Mar 28 2008. 01 28 AM IST
In an attempt to help India’s largest power generation company, the state-owned NTPC Ltd, acquire a global footprint, the cabinet committee on economic affairs or CCEA on Thursday removed the Rs1,000 crore ceiling for the company’s equity investments in joint ventures and wholly owned subsidiaries.
NTPC will no longer require approvals from the government for equity investments exceeding this limit. In the past, the delays associated with securing this approval have resulted in the company missing out on investment opportunities. It will also boost the company’s chances of winning Indian projects through the competitive bidding route.
An NTPC unit in Ratnagiri, Maharashtra. The company will no longer require government approvals for equity investments exceeding Rs1,000 crore in joint ventures and wholly owned subsidiaries
“This is a good news for us and will help us to expand our operations in a better and efficient manner. This covers both Indian and overseas projects,” said T. Sankaralingam, chairman and managing director, NTPC.
NTPC has a power generation capacity of 27,404MW and plans to increase this to 50,000MW by 2012 and at least 66,000MW by 2017.
The company lost out on an investment opportunity in December, when it was unable to bid for Singapore’s Tuas Power because the government approval did not come in time.
“In an international competitive scenario, decision making must be swift in order to land a deal. Since the Tuas deal required us to commit more than Rs1,000 crore as equity, we needed a nod from the CCEA, which we could not get in time,” said a senior NTPC executive, who did not wish to be identified.
The removal of the ceiling comes at a time when NTPC is in discussions with more than one foreign power generation company to acquire assets worth in excess of $1 billion (Rs4,020 crore) as reported by Mint on 20 December.
“This is a very positive development for NTPC. The other navaratna (flagship public sector) companies should also follow suit and should be accorded similar kind of facility to compete for international projects,” said A.K. Lakhina, former chairman and managing director, Rural Electrification Corp.
NTPC returned a net profit of Rs6,726.40 crore in 2006-07 on sales of Rs30,638.70 crore and has planned a capital expenditure of Rs1.6 trillion by 2012.
The company, which has cash reserves of around Rs12,000 crore, is yet to succeed in its quest for overseas power generating assets.
Comment E-mail Print Share
First Published: Fri, Mar 28 2008. 01 28 AM IST
More Topics: NTPC | CCEA | Investment | Tuas Power | Corporate News |