The Hindu Business Line : NTPC exempted from equity cap norms for bidding

New Delhi, March 27 In a move that could provide greater operational flexibility for power major NTPC Ltd, the Centre has exempted the State-owned utility from the Rs 1,000-crore investment cap in firming up joint ventures or setting up subsidiaries to bid for power projects.

The Cabinet Committee on Economic Affairs on Thursday gave its nod to waive the ceiling for equity investment by NTPC to establish financial joint ventures and wholly-owned subsidiaries in India or abroad for participating in bidding called by state utilities and distribution licensees, an official Government spokesperson said.

Competitiveness

The approval would facilitate participation of NTPC in bidding for the development of power projects initiated by Government utilities and result in greater competition and establishment of more public sector power projects, the spokesperson said after the CCEA meeting.

Reacting to the move, senior NTPC officials said the greater flexibility would aid the utility in improving competitiveness, especially in the light of the upcoming ultra mega power projects.

Exemption

Being a ‘Navratna’ company, NTPC’s participation in any joint venture for bidding is currently capped at Rs 1,000 crore. The company had been asking for a special exemption from the Government, since it had to wait for a Cabinet clearance for an over Rs 1,000-crore equity participation in a joint venture for participating in bids for a power project.

The waiver is, however, subject to implementation of a maximum of 10 power projects. Also, the investment ceiling of 15 per cent of the company’s net worth in one project and overall ceiling of 30 per cent in all such projects would remain. NTPC is eyeing a 50,000-MW capacity by 2012. It has a total installed capacity of 29,144 MW.

Myanmar project

The Centre also approved a Rs 535.91 crore multi-modal transit transport project in Myanmar, which India will use for improving access to the North-Eastern states. The Union Cabinet sanctioned the funds under the ’Aid to Myanmar’ project for the upgradation of Sittwe Port and Kaladan Waterway. The money will also be used for construction of a road from Setpyitpyin (Kaletwa) to the India-Myanmar border.

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