The Hindu Business Line : DPSC looking for strategic investor to fund expansion

DPSC Ltd (erstwhile Dishegarh Power Supply Company Ltd), one of the oldest utilities in the country supplying power to coal companies in the Asansol belt of West Bengal, is looking for a strategic equity investor and arrange for debt financing its expansion plans, entailing an investment of about Rs 200 crore.

Around Rs 60 crore has to come in as equity to improve the paid-up capital base so that the company can get better returns as per the new guidelines laid down by Central Electricity Act, 2003. Earlier, return was linked to the capital base or net owned funds, but now it is linked to only issued share capital and share premium balance.

FIs control about 43 per cent of the company's total equity, about 7 per cent is held by Andrew Yule & Co Ltd, about 30 per cent by Descon Ltd, and the public about 9 per cent.

Established in 1919, DPSC has been supplying power to its licensed area covering 618 sq km around Asansol.

The company first set up a 2 MW thermal generating station in 1928 at Dishergarh. By 1938 its generating capacity had touched 22.2 MW with the addition of the Sheebpore power station.

DPSC's installed capacity increased to 42.2 MW after the commissioning of the Chinakuri power station in 1992. The capacity was further raised to 52.2 MW with the installation of a 10 MW turbine at Chinakuri.

But due to antiquated technology of older stations of Dishergarh and Sheebpore and their steady degeneration over the years, derated capacity stood at 47.8 MW in 2003, while cost of generation at Sheebpore compelled suspension of operation of the plant in August 2003. Similarly, old boilers of Dishergarh had to be scrapped in 2003-04 due to maintenance problems.

Though the company has maintained a consistent profit performance since inception till 1999-2000, sources say the track record was disturbed with the introduction of the regulatory regime from 2000-01. Accumulated loss now stood at about Rs 10.85 crore.

The company is exploring the feasibility of increasing the generation capacity by 30 MW with the installation of fluidised bed boilers, which will use cheaper and lower grade coal bringing down the generation cost. This apart, the company proposes to set up soon a pilot project of 5 MW using coal-bed methane gas in the Asansol area.

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