New Delhi: State-run NTPC Ltd on Tuesday entered into a joint venture agreement with the Railway Ministry to set up a 1,000 MW power plant in Bihar at a cost of Rs1,605 crore.
A joint venture company -- Bharatiya Rail Bijlee Company Ltd -- would be set up for the purpose and NTPC would have a 74% stake in the company, while the Railways would have 26%. The power major would put in Rs1,188 crore of capital and the Railways would invest Rs417 crore.
A major portion of electricity generated through the proposed plant at Nabinagar would be utilised by the Railways for 164 traction substations in the eastern and western regions.
“The cost of power generated from the plant would be 213 paise as compared to 428 paise usually,” Power Minister Sushilkumar Shinde said at the agreement signing ceremony here.
He said the state electricity boards charge 2-3 times the rate at which they purchase power from central utilities like NTPC.
The Railways expects to save up to Rs600 crore annually after paying wheeling and transmission charges, reducing operating expenses by 1%-2%. The average annual requirement of railways is 2,000 MW.
Railway Minister Lalu Prasad Yadav said that about 10% of the electricity generated from the plant would be diverted to other users, including state governments.
The Railways at present spends about Rs5,700 crore a year toward electric energy for traction and non-traction purposes.
The plant is expected to commence operations after 30 months from receipt of approval of investment by both parties, likely to come by December-end, NTPC CMD T Sankaralingam said.
An MoU for the agreement was signed in February 2002. However, the Cabinet Committee on Economic Affairs approved the joint venture company only in February this year.