‘Coal block cancellations will put us back by a Plan period’

The Rs 64,830 crore NTPC Ltd, the country's largest power generator, is one of the biggest beneficiaries of the recent government decision to recast the losses of the country's distribution sector utilities. In an interview with The Indian Express, the state-owned power major's Chairman and Managing Director Arup Roy Choudhury explains the impact of the move and the company's future plans. Excerpts:

How important is the recent Cabinet decision clearing a recast of distribution sector losses, both as a sentiment booster for the sector and in commercial terms for NTPC?

This (the decision to recast debt) is a springboard given by the Centre for states to take real corrective reforms in the distribution sector. Going beyond the positive impact for NTPC, the step, if implemented in the right earnest, could offer a booster for the economy as a whole... It's good for us (NTPC) as state electricity boards are our immediate customers and any measure that helps restore their financial viability will, in turn, help improve our position...

Does this partially mitigate the mess in power sector?

The problems in the power sector are two pronged — one being the distribution losses and the second on the coal supply side. So while the debt recast mitigates the distribution side problem, on the coal supply side though, the issues remain. There is absolutely no sign of anything drastic being done on the coal side. It's true that new FSAs (fuel supply agreements) are being signed (by Coal India Ltd), which is a sign that they plan to increase (coal) production. But the problem is that the power sector is growing at a much faster pace than the rate at which coal production is being ramped up.

Do you think the ongoing coal block deallocations would impact the power generation side?

... contd.

ALSO READ

Pakistan stock markets zoom to record high of 20,000 pts for first time in history

Reserve Bank of India puts restrictions on gold imports by banks

Nestle India Q1 net profit at Rs 279 cr in quarter

BSE Sensex plunges over 431 pts, NSE Nifty retreats from 28-mth highs