The Hindu Business Line : DVC project in a limbo over management control

THE Maithon Right Bank (MRB) project of Damodar Valley Corporation (DVC) seems to be headed for another spell of uncertainty with the participating Governments developing cold feet over giving management control of the project to any private sector company.

Very little progress has been made since the entry of Tata Power in the scene late last year in lieu of BSES Ltd.

While the Tatas are looking for a stake not below 51 per cent (with management control), the mood among the participating Governments is no longer in favour of this pattern of shareholding — more so in the current political dispensation — when privatisation is no longer the buzzword, sources said.

While the DVC board is set to meet within a fortnight to discuss the issue, the Chairman, Mr Ajay Shankar, told presspersons here today that the corporation is in the process of finalising a suitable joint venture partner for Maithon Power Ltd which now exists as a wholly-owned subsidiary of DVC.

The multi-utility corporation, which was formed through an Act of Parliament, is co-owned by the Governments of Jharkhand and West Bengal and the Centre.

Mr Shankar admitted that the progress of the 1,000 MW export-oriented mega thermal power station located in Jharkhand has been affected due to the exit of the erstwhile BSES.

Sources said that land acquisition for the project was nearly completed and it had all clearances such as water, environment and coal linkage in place. The project is a vital component of DVC's 2,210 MW capacity addition programme for the current plan period.

DVC proposes to set up additional units at Mejia in West Bengal and Chandarapura in Jharkhand. Of the three additional units at Mejia entailing a capacity of 710 MW, one is scheduled to commence operation by October 2004, while orders are being placed for the other four on Bharat Heavy Electricals Ltd (BHEL). For the fourth unit at Mejia, the corporation has saved Rs 100 crore in interest costs by funding it from internal resources with no additional borrowings.

The remaining projects are to be funded by the Power Finance Corporation under the Accelerated Power Generation and Supply Programme of the Union Power Ministry.

DVC, formed in 1948, has some old units which it is now refurbishing through R&M programmes, Mr Shankar said. He added that National Thermal Power Corporation was acting as DVC's consultant for these projects. The corporation has allotted Rs 443 crore for capital expenditure in 2003-04.

DVC reaped a net surplus of Rs 924 crore according to the provisional results of 2003-04, which includes a settlement of Rs 540 crore as past dues of the West Bengal State Electricity Board. Power sales increased by 21 per cent during 2003-04 over last year.