The Rajasthan Rajya Vidyut Utpadan Nigam (RUVN), coal-fired thermal power plant located in Motipura village in Chhabra Tehsil, is being acquired by the nationally owned National Thermal Power Corporation (NTPC). The planned capacity of the Chhabra unit which started in 2009 is 2320 MW.
It is learnt that the NTPC has decided to take over in the first phase of the 1000 MW plant at an estimated price of Rs 4,000 crore. This sell-off would come as a big relief to the Rajasthan Rajya Vidyut Utpadan Nigam, which has suffered a loss of Rs 5000 crore till March 2016 and the losses have further gone up in the subsequent period.
Finance director of NTPC Kulamani Biswal, who had undertaken the task of evaluating the assets of the Chhabra unit, said that the depreciated book value which he found was Rs 4000 crore. But this would be subject to the approval of the Central Electricity Authority (CEA).
The running plant is of 1,000 MW and 1,320 MW capacity is under construction. The RVUN on its part has also done the evaluation by hiring a top notch consulting company. The evaluation of the RVUN matches the the depreciated book value of the NTPC. If all goes well the Chhabra unit will become part of the NTPC run units and the employees who are with the RUVN will become part of the NTPC in an asset transfer process. This would take about three-four months. The NTPC offer will have to be approved by the Cabinet also.
NTPC Ltd will pay Rs 1100 crore to RUVN for its stake and Rs 4000 crore of debt as part of a deal reached with the state that will also bring down cost of power for a state power distribution firm and for consumers.
The deal will lower RVUN power generation cost through financial restructuring and improvements in plant operations, which in turn, will lower the power purchase cost of state distribution firm Rajasthan Urja Vikas Nigam Ltd (RUVNL) by 33 paise and power tariff to consumers by five paise, the power tarrif going the consumer is expected to be cut from Rs3.89 a unit now to Rs3.84 after the transaction is completed.
The NTPC which is country’s biggest power producing company also benefits from the deal as setting up a greenfield thermal power plant of similar capacity will cost more, while the Rajasthan government benefits from exiting a project that has been making recurrent losses partly because of the comparatively high amount of heat required to produce every unit of electricity.
The NTPC in the second phase that would cost Rs 9750 crore it would acquire the two 660 MW units under construction now.
