The Hindu Business Line : Rlys, NTPC finalising draft for Nabinagar plant

New Delhi, Sept. 8 Indian Railways and NTPC are in the process of finalising the draft memorandum of understanding for setting up the 1000-MW power plant at Nabinagar for which the joint venture would build a 215-km rail-link from Nabinagar to Karanpura coal mines.

The joint venture, called Bhartiya Rail Bijlee Company Ltd, would have a 74 per cent (Rs 118.26 crore) equity participation of NTPC and 26 per cent (Rs 417.5 crore) by the Railways. While 90 per cent of the power generation from plant would be supplied to the Railways, 10 per cent would be supplied to the State Government.

Project cost

“We would source five million tonnes per annum of coal from Karanpura for the power plant,” said official sources from the Railway Ministry. The Rs 5,352.5-crore project cost, which includes the cost of building the rail link to coal mines, would have a 30 per cent equity element, and the rest would be raised through debt.

The project would require 1,700 acres of land for which the Bihar Government has issued an in-principle approval. “An in-principle approval is also in place for water supply and an environmental clearance has been obtained for the project,” said sources.

Compared to an average cost of Rs 4.22 per unit of electricity that the Railways pays for traction use, the expected rate from this project is Rs 3.38 per unit. The Rs 3.38 figure has been arrived at by taking into account Rs 2.13 per unit generation cost and Rs 1.25 per unit wheeling (transmission) charges.

Currently, different zonal railways pay different charges to various state electricity boards and companies, with per unit price ranging from Rs 2.94 to Rs 5.04.

By virtue of the 26 per cent stake in the venture, Indian Railways would have a controlling say on various matters such as tariff structure, evacuation of power, fall back arrangement and trading of power generated from the project, the official said.

On an annual basis, the Railways consumes 13 billion units, out of which 10.4 billion are for traction use. The Railways needs 2,200 MW capacity for its entire network.