Financial Daily from THE HINDU group of publications
Friday, Feb 15, 2002
Financial Daily from THE HINDU group of publications Friday, Feb 15, 2002 |
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Logistics
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Railways Joint venture with NTPC to power Rlys' requirement Our Bureau
NEW DELHI, Feb. 14 THE Railway Ministry and National Thermal Power Corporation (NTPC) will form a joint venture company to set up power plants to meet the energy requirements of the Indian Railways. The move is aimed at helping the Indian Railways reduce its power bills that have been mounting over the years due to the high tariff rates charged by the State electricity boards (SEBs). The Railways expects to save around Rs 1,000 crore per annum in its electricity bill, which is currently around Rs 4,500 crore per annum. Of the Rs 1,000 crore savings, Rs 800 crore will be on account of lower tariffs, according to a senior Railway Board official. The average power tariff charged by NTPC is around Rs 2.50 per unit for the power delivered to the SEB. The Railways, on the other hand, pays an average of around Rs 4.30 per unit to the SEB, which is nearly two times higher. Officials said that the joint venture company would be financed through a 70:30 debt equity ratio. The Indian Railways will hold 50 per equity, with the balance 50 per cent contribution coming from the NTPC. The investment requirement by the Railways over the next five years is estimated at around Rs 1,500 to Rs 1,600 crore. The internal rate of return on the investment works out to around 16 per cent. The joint venture company will identify and set up projects at various locations to cater to the electric energy requirements of the Railways for both traction and non-traction purposes. A memorandum of understanding (MoU), which will be signed between the two parties on Monday, will also examine the legal aspects involved in drawing power directly from the central utility. Hit by the mounting power bills, the Railway Ministry had a couple of years ago sought the Power Ministry's permission to purchase power directly from NTPC by laying its own lines
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