People's Democracy

‘Allow NTPC And BHEL Joint Initiative’

The following is the text of the letter written by CITU general secretary and MP, Chittabrata Majumdar, to prime minister Dr Manmohan Singh on October 18, 2006.

THIS is in reference to the recent media reports about NTPC and BHEL joint initiative in setting up power projects in the country.

In this context I invite your attention to the more than a decade old recommendation of the Parliamentary Standing Committee on Energy of the tenth Lok Sabha, which had recommended in the 26th report that the Central Public Sector Undertakings like BHEL and NTPC should come together and explore the possibility of taking up power projects on joint venture basis. In response, the Ministry of Power vide OM.No.P-426/94-IPC (Vol IV) dated 18.09.95 had informed: “BHEL has been in correspondence with NTPC to explore the possibility of taking up power projects jointly. Recently, BHEL has suggested to NTPC for joint working in respect of 650 MW Combined Cycle Gas Project at Shankerpalli near Hyderabad and 2 x 500 MW Vizag Phase-II Thermal Project which have been allotted to NTPC by the government of Andhra Pradesh. On the subject of BHEL and NTPC joining hands to take up power projects, Secretary (HI) has written to Special Secretary, Ministry of Power. It has been decided to constitute an inter-departmental committee in which Chief Executives of BHEL and NTPC can participate to firm up the modalities for collaboration between BHEL and NTPC on a long term basis.” This was recorded in the Action Taken Report of the aforesaid committee, which was presented to parliament on 22.12.95. 

I am, therefore, quite amused to see reports that Ministries of Power and Heavy Industries, are still engaged in talks about forming joint venture of NTPC and BHEL for power projects. Successive governments had kept the above recommendation in cold storage without acting on it and in their quest for public-private-partnership, the public-public-partnership of NTPC and BHEL had been allowed to linger for years. NTPC and BHEL had a combined reserve and surplus of Rs 35,000 crore as on 2003-04. If debt equity ratio of 4:1, as is being allowed for Public-Private-Partnership, is extended to NTPC-BHEL combine there is no techno-economic reason to question their ability to take up the power projects planned realistically for next 5 years keeping in view BHEL’s annual equipment manufacturing capacity being enhanced to 10,000 MW by March 2007 from 6000 MW at present.

I, therefore, seek your immediate intervention on the issue of NTPC and BHEL joining hands in the background of government pronouncements on ultra mega power projects in the country.