Troubles mount at DVC as executives quit

After Arup Roy Choudhury, the NTPC chief who was given the additional charge of chairman at Damodar Valley Corporation (DVC), exited the Kolkata-based loss-making company, other NTPC officials appointed at DVC are following suit.

DVC is eastern region’s largest generation utility with nearly 5,800 MW installed capacity.

Earlier, NTPC had assigned a number of its executives, including Choudhury, to handle crucial responsibilities at DVC in a bid to improve the company’s efficiency.

NTPC Chairman Choudhury was offered the additional charge of chairman of DVC in last November.

But the association came to a halt on May 27 as Choudhury decided to exit DVC. Following his footsteps, nine more senior NTPC officials relinquished their responsibilities at DVC on Thursday.

While there is no official communication on the reasons behind Choudhury’s hurried exit, sources said he was peeved at the stiff resistance of DVC employees to a proposal for transferring the electricity transmission distribution business and loss-making irrigation facilities to the State Governments of West Bengal and Jharkhand.

The management felt the transfer of such assets would help revive DVC’s financials. The company has a debt of ₹30,000 crore. The debt burden became a major challenge for the company as the stakeholders—West Bengal and Jharkhand State Governments and the Centre—denied to infuse fresh capital.

Instead, the Centre asked DVC to raise nearly ₹6,600 crore through Government-guaranteed bonds to meet equity shortfall.

At the same time, earnings were impacted as the Central regulator denied DVC higher tariff to service loans raised to meet capital inadequacy.

Also, a host of power projects suffered time overrun due to land acquisition issues. In many cases, power projects came up without any fuel linkage as the development of captive mines was inordinately delayed. If that was not enough, Jharkhand stopped paying for electricity bills amounting to around ₹160 crore a month, resulting in an arrear of ₹7,000 crore and started pressing DVC to take over the entire electricity distribution business (including retail consumers) in the valley.

The Choudhury-led management was against the idea as Jharkhand records one of the lowest recovery rates, due to the poor law and order situation. To get rid of the problem, it proposed hiving off the electricity transmission and distribution business and focussing on generation.

But before the proposal could be discussed at the board, DVC employees launched protest against Choudhury and the rest of the NTPC team, beginning April.

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