Foreign Minister Pranab Mukherjee recently inaugurated the Tuticorin power project. Who will its beneficiaries be?
The NLC obtained the Government sanction in May, 2008 for the development of a 1,000 MW coal-based thermal power project (2 x 500 MW) at Tuticorin at an estimated cost of Rs 4,910 crore. NLC floated a new company named NLC Tamil Nadu Power Limited, a joint venture between NLC and Tamil Nadu Electricity Board (TNEB), with NLC holding 89 per cent equity and TNEB 11 per cent. Rural Electrification Corporation Limited has sanctioned the entire debt requirment of Rs 3,437 crore. The Tuticorin Port Trust has allotted 133 hectare of land for the development of this project on long-term lease. Major equipments will be supplied and erected by BHEL. The power plant will be operational by November 2012. The beneficiaries would be all southern states and Puducherry, except Andhra Pradesh. Ten per cent of the power has to go out of the State. Out of the remaining 90 per cent, Tamil Nadu has requested for 60-70 per cent from the Power Ministry, which is yet to be granted. NLC has given a no objection certificate for this. Not only this, with the commissioning of this project, the energy scenario in southern India would improve and so would the traffic at Tuticorin Port Trust. Employment, in and around Tuticorin, will increase as well. The major beneficiary will be Tamil Nadu and the southern grid. We have signed power purchasing agreements with Karnataka, Kerala, Puducherry and Tamil Nadu. The regulatory authority, CERC, decides the tariff at which we will supply power. In my opinion, we would be able to give power from Rs 2.5 to 2.85 per unit.
The project has run into a legal tussle over land allotment. What are the chances of a solution and how soon do you see this problem being resolved?
It was a minor issue. Most of the land in the coastal area was allotted to the Port Trust some 50-60 years ago. In that, a portion was a reserve forest allotted to SEPC which tried to create problems at that time. It has been overcome. There are no issues regarding land. However, there were disputes about shifting of structure and pipeline, which have been sorted. Things are moving smoothly now. We have awarded work to BHEL worth Rs 3,196 crore for BTG. They have unloaded 7,000 metric tonnes of steel already. The power plant will be operational by November 2012.
NLC is mainly into lignite exploration. It has now moved towards power generation. The company is also moving towards major expansion. What are the other areas that the company is looking to diversify into?
We have started work at Tuticorin Power Project, the foundation stone of which was laid on March 2, 2008. Besides, NLC is looking at major diversification in areas of wind power and hydropower generation. We are trying to create a shell company by the name of NLC Videsh, which is at a preliminary stage. We have taken clearance from the Board; the Ministry's approval is awaited. Through this, we will do business abroad. Our aim is to acquire a coal or lignite block abroad, mine it and send it to India to our own power station. We also aim to lay some more thermal power stations around the eastern coast. NLC’s mission today is complete 10,000 MW of power generation by the end of 12th Plan besides creating corresponding mining facilities. Our main competence is lignite. We are in discussions to get coal blocks also, either in India or abroad. This will be a major boost in helping us achieve our mission. Even if we fall short, we intend to complete it through hydropower. We have plans to generate 2,000 MW of power. Uttarakhand has huge potential for hydropower generation. We are in talks with the Uttarakhand government. As for wind power, we wish to install 50 MW initially. Our aim is to avoid incurring expenditure during construction of thermal power plants, which consumes 5 MW and continues for 2.5 years, incurring a total cost of Rs 25-30 crore. Out of the 50 MW installed wind power, we will get around 20-25 MW, which will be partially used to run our thermal plants and the rest will be supplied to our townships. If successful, another 50 MW will be installed. We wish to multiply on our turnover. Our sale is mainly power and there we wish to multiply more.
Mining is seen as being environmentally damaging. In this regard, what are the environmental practices that you follow?
Mining is a devastating activity for the earth. NLC is little different from others. Major mining companies use conventional mining technologies, whereas NLC has gone for the Continuous Mining System. We use specialised mining equipment imported from Germany and also indigenous suppliers like L&T and MBE. This is less environmentally damaging and less polluting technology. The other advantage is that continuous refilling of mining is carried out, so that it makes reclamations of earth faster. This serves as an advantage to people from whom we have taken land and in probably 20 years we can return the land as a fertile land. We are highly environmentally conscious and careful. We have got a bird sanctuary and in coal removal areas, we have created lakes, forests, deer parks and so on. Today NLC has planted 17 million trees in Neyveli. The Continuous Mining System that we follow is a very able one. But highly capital-intensive equipment are required and running maintenance is also not low, which means our cost of production is a little high. So, we have requested the regulatory authority to fix a tariff that is viable to us.
What are the projects in the pipeline as you go about fulfilling your mission to generate 10,000 MW of power?
We already have 2,490 MW in operation. Besides, by 2010 we would be adding 250 MW in Rajastahn and 500 MW in Neyveli as a part of Thermal II expansion. There is a 1,000 MW plant in Tuticorin for which work has started, and we wish to add another 1,000 MW in Rajasthan, Madhya Pradesh, Tamil Nadu (Neyveli) and Gujarat each, besides 2,000 MW in Uttar Pradesh and Orissa separately. In Jayamkondam in Tamil Nadu, where there is a huge lignite reserve, we will set up a 1,600 MW plant. The support of the government has been unconditional, whether State or Central.
Financial inclusion is a necessary aspect to carry forward India's growth story. The government does its bit. As a corporate entity, more so a PSU, what are your efforts towards CSR?
We are far ahead compared to other organisations with regard to CSR. We got the prestigious CSR Award for 2006, jointly instituted by the Socio-Economic Development Foundation, FICCI and Business World magazine. We take care that within 8-10 km of the plant, people who stay are given enough opportunity to develop their skills to get indirect employment. We are running a school under the control of Jawahar Education Society and other 34 Schools, under the banner of NLC, which houses 40,000 children in the Township. We have a degree college as well and a 350-bed hospital. We have to take care of the employees and their children. Besides, we are running two schools for the visually challenged, that have 30 students. For the mentally challenged, we opened a school, Sneha Opportunity, that has 120 children and the entire expense is met by NLC. We have also begun manufacturing of artificial limbs. We try and cater to the needs of the downtrodden. My aim is to see that children of our employee grow. My personal aim is to focus on children, their health, education, basic amenities and we have developed the requisite infrastructure. We try and take our employees along with us, to develop a cordial employee-employer relationship and attend to their genuine needs for the welfare and growth of the company.
In these times, when good corporate governance has become so important, what are the efforts of NLC towards achieving this?
We have practically made the organisation electronically governed. In our company, the entire procurement system is done electronically. We are now 50 per cent through procuring everything electronically, besides making e-payments to employees and vendors. By middle of 2010, all major offices, especially procurement and contract division, will become paperless. Our entire effort is to make monitoring system at power plants effective. We have created our own system to monitor the functioning and performances of several units.
Has NLC been affected by the global slowdown that has affected various sectors?
The effect is visible mainly in real estate. As for the impact on PSUs, there is none, may be due to our strong banking system. In NLC,there is no effect of slowdown. We are able to do as we have been doing and expect to do better everyday.
The NLC obtained the Government sanction in May, 2008 for the development of a 1,000 MW coal-based thermal power project (2 x 500 MW) at Tuticorin at an estimated cost of Rs 4,910 crore. NLC floated a new company named NLC Tamil Nadu Power Limited, a joint venture between NLC and Tamil Nadu Electricity Board (TNEB), with NLC holding 89 per cent equity and TNEB 11 per cent. Rural Electrification Corporation Limited has sanctioned the entire debt requirment of Rs 3,437 crore. The Tuticorin Port Trust has allotted 133 hectare of land for the development of this project on long-term lease. Major equipments will be supplied and erected by BHEL. The power plant will be operational by November 2012. The beneficiaries would be all southern states and Puducherry, except Andhra Pradesh. Ten per cent of the power has to go out of the State. Out of the remaining 90 per cent, Tamil Nadu has requested for 60-70 per cent from the Power Ministry, which is yet to be granted. NLC has given a no objection certificate for this. Not only this, with the commissioning of this project, the energy scenario in southern India would improve and so would the traffic at Tuticorin Port Trust. Employment, in and around Tuticorin, will increase as well. The major beneficiary will be Tamil Nadu and the southern grid. We have signed power purchasing agreements with Karnataka, Kerala, Puducherry and Tamil Nadu. The regulatory authority, CERC, decides the tariff at which we will supply power. In my opinion, we would be able to give power from Rs 2.5 to 2.85 per unit.
The project has run into a legal tussle over land allotment. What are the chances of a solution and how soon do you see this problem being resolved?
It was a minor issue. Most of the land in the coastal area was allotted to the Port Trust some 50-60 years ago. In that, a portion was a reserve forest allotted to SEPC which tried to create problems at that time. It has been overcome. There are no issues regarding land. However, there were disputes about shifting of structure and pipeline, which have been sorted. Things are moving smoothly now. We have awarded work to BHEL worth Rs 3,196 crore for BTG. They have unloaded 7,000 metric tonnes of steel already. The power plant will be operational by November 2012.
NLC is mainly into lignite exploration. It has now moved towards power generation. The company is also moving towards major expansion. What are the other areas that the company is looking to diversify into?
We have started work at Tuticorin Power Project, the foundation stone of which was laid on March 2, 2008. Besides, NLC is looking at major diversification in areas of wind power and hydropower generation. We are trying to create a shell company by the name of NLC Videsh, which is at a preliminary stage. We have taken clearance from the Board; the Ministry's approval is awaited. Through this, we will do business abroad. Our aim is to acquire a coal or lignite block abroad, mine it and send it to India to our own power station. We also aim to lay some more thermal power stations around the eastern coast. NLC’s mission today is complete 10,000 MW of power generation by the end of 12th Plan besides creating corresponding mining facilities. Our main competence is lignite. We are in discussions to get coal blocks also, either in India or abroad. This will be a major boost in helping us achieve our mission. Even if we fall short, we intend to complete it through hydropower. We have plans to generate 2,000 MW of power. Uttarakhand has huge potential for hydropower generation. We are in talks with the Uttarakhand government. As for wind power, we wish to install 50 MW initially. Our aim is to avoid incurring expenditure during construction of thermal power plants, which consumes 5 MW and continues for 2.5 years, incurring a total cost of Rs 25-30 crore. Out of the 50 MW installed wind power, we will get around 20-25 MW, which will be partially used to run our thermal plants and the rest will be supplied to our townships. If successful, another 50 MW will be installed. We wish to multiply on our turnover. Our sale is mainly power and there we wish to multiply more.
Mining is seen as being environmentally damaging. In this regard, what are the environmental practices that you follow?
Mining is a devastating activity for the earth. NLC is little different from others. Major mining companies use conventional mining technologies, whereas NLC has gone for the Continuous Mining System. We use specialised mining equipment imported from Germany and also indigenous suppliers like L&T and MBE. This is less environmentally damaging and less polluting technology. The other advantage is that continuous refilling of mining is carried out, so that it makes reclamations of earth faster. This serves as an advantage to people from whom we have taken land and in probably 20 years we can return the land as a fertile land. We are highly environmentally conscious and careful. We have got a bird sanctuary and in coal removal areas, we have created lakes, forests, deer parks and so on. Today NLC has planted 17 million trees in Neyveli. The Continuous Mining System that we follow is a very able one. But highly capital-intensive equipment are required and running maintenance is also not low, which means our cost of production is a little high. So, we have requested the regulatory authority to fix a tariff that is viable to us.
What are the projects in the pipeline as you go about fulfilling your mission to generate 10,000 MW of power?
We already have 2,490 MW in operation. Besides, by 2010 we would be adding 250 MW in Rajastahn and 500 MW in Neyveli as a part of Thermal II expansion. There is a 1,000 MW plant in Tuticorin for which work has started, and we wish to add another 1,000 MW in Rajasthan, Madhya Pradesh, Tamil Nadu (Neyveli) and Gujarat each, besides 2,000 MW in Uttar Pradesh and Orissa separately. In Jayamkondam in Tamil Nadu, where there is a huge lignite reserve, we will set up a 1,600 MW plant. The support of the government has been unconditional, whether State or Central.
Financial inclusion is a necessary aspect to carry forward India's growth story. The government does its bit. As a corporate entity, more so a PSU, what are your efforts towards CSR?
We are far ahead compared to other organisations with regard to CSR. We got the prestigious CSR Award for 2006, jointly instituted by the Socio-Economic Development Foundation, FICCI and Business World magazine. We take care that within 8-10 km of the plant, people who stay are given enough opportunity to develop their skills to get indirect employment. We are running a school under the control of Jawahar Education Society and other 34 Schools, under the banner of NLC, which houses 40,000 children in the Township. We have a degree college as well and a 350-bed hospital. We have to take care of the employees and their children. Besides, we are running two schools for the visually challenged, that have 30 students. For the mentally challenged, we opened a school, Sneha Opportunity, that has 120 children and the entire expense is met by NLC. We have also begun manufacturing of artificial limbs. We try and cater to the needs of the downtrodden. My aim is to see that children of our employee grow. My personal aim is to focus on children, their health, education, basic amenities and we have developed the requisite infrastructure. We try and take our employees along with us, to develop a cordial employee-employer relationship and attend to their genuine needs for the welfare and growth of the company.
In these times, when good corporate governance has become so important, what are the efforts of NLC towards achieving this?
We have practically made the organisation electronically governed. In our company, the entire procurement system is done electronically. We are now 50 per cent through procuring everything electronically, besides making e-payments to employees and vendors. By middle of 2010, all major offices, especially procurement and contract division, will become paperless. Our entire effort is to make monitoring system at power plants effective. We have created our own system to monitor the functioning and performances of several units.
Has NLC been affected by the global slowdown that has affected various sectors?
The effect is visible mainly in real estate. As for the impact on PSUs, there is none, may be due to our strong banking system. In NLC,there is no effect of slowdown. We are able to do as we have been doing and expect to do better everyday.
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