Date | May 11, 2017:

Central power utility Damodar Valley Corporation (DVC) is expecting a no-objection certificate from the West Bengal government soon for its joint venture with Tamil Nadu-based public sector company NLC India (Neyveli Lignite) to operate Raghunathpur thermal power plants (RTPS), an official said on Thursday.

The official hinted that the delay in giving approval to the joint venture by the Mamata Banerjee government has been causing financial losses because "Rs 800 crore losses, out of Rs 1000 crore (of losses) in 2016-17, was directly attributed to RTPS".

NLC India will have 74 per cent stake in the joint venture while DVC has 26 per cent.

"We are hopeful the joint venture will come through soon. We have already got approval from central and Jharkhand government. We are confident to get the approval from Bengal government soon," DVC's Chairman Andrew W.K. Langstieh said.

The power utility did not have any option but to go for joint venture, he said at an interactive session at Merchants' Chamber of Commerce and Industry here.

The 1,200 MW project in West Bengal's Purulia was originally conceived and subsequently brought into commercial operation by DVC after missing several deadlines.

"Out of 1200 MW of phase I of Raghunathpur thermal power plants, we have power purchase agreements (PPAs) of 450 MW. In the context of today's market, it is difficult to get new PPAs. That is why we were looking for joint venture partners and NLC India which had 650 MW PPAs was fitted well," he said.

He also said: "DVC incurred Rs 1000 crore losses in 2016-17 and out of it, Rs 800 crore was directly attributed to the RTPS in terms of depreciation and interest costs. The balance Rs 200 was because of provisioning to obey pay commission's recommendation."

DVC had decided to divest the project where it invested around Rs 8,000 crore.

Moreover, as part of a fresh allotment process of 42 blocks to central and state PSUs under the provisions of the Coal Mines (Special Provisions) Act, the power utility had secured two coal mines- Khagra Joydev block in Birbhum district of West Bengal and Tubed coal block in Jharkhand for captive use.

"We have identified MDO (mine developer and operator) for Khagra Joydev and hope to start operation within 18 months. For Tubed, we are finalising MDO soon," he added.

(Source: http://www.business-standard.com/)