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NTPC Unable to Place a Single Order Since 2009

  • Land acquisition, coal linkages issues and a lawsuit main stumbling blocks; delays may worsen power situationState-owned NTPC Ltd has not placed a single order for power generation equipment since 2009 due to an ongoing lawsuit, issues relating to land acquisition and coal linkages to fuel its projects.
  • Such a delay in awarding power generation equipment orders may not only affect India’s largest power generation utility’s capacity-addition plans but will also worsen the power shortage in the country, given the utility’s contribution to the Plan targets. NTPC has an installed power generation capacity of 36,104MW, and is targeting an installed capacity of 75,000MW by 2017 and 128,000MW by 2032.
  • “No orders have been given for the last two years as there are unresolved issues with the projects and some legal complications. In the entire period, only an 8MW order for a small hydro project in Singrauli was placed,” said an NTPC executive, requesting anonymity.
  • NTPC has an installed power generation capacity of 36,104MW and projects totalling 14,088MW under construction. Equipment for 16,192MW is still under the tendering process, while it plans to award orders for equipment meant to generate 40,000MW during the 12th Plan period (2012-17) for a value of about Rs.2 trillion. NTPC has 15 coal-based, seven gas-based and six joint venture power stations.
  • While chairman and managing director Arup Roy Choudhury confirmed the order status, an NTPC spokesperson in an emailed response said, “As you are aware, two bulk tenders of NTPC for nine units (of) 660MW and equal number of 800MW units are under finalization and the delay is due to reasons beyond control of NTPC. These are substantial orders which shall cater to eight new projects, but for issues related to land acquisition, coal linkages and legal.”
  • Of India’s installed power generation capacity of 186,654MW, NTPC makes up 19.34%.
  • Mint reported on 27 December that NTPC has been unable to place bulk orders with short-listed bidders for India’s biggest power generation contract to buy equipment totalling 7,200MW for four projects (nine units of 800MW each) as it has been unsuccessful in acquiring land for some of them.
  • NTPC is also facing problems in awarding another bulk equipment contract for the supply of 11 boilers and 11 turbines of 660MW each (while nine sets are for NTPC, two are for DVC).
  • The utility floated a tender early last year for this but the project has been stuck after one of the bidders, Ansaldo Caldaie Boilers India, was disqualified on technical grounds. Ansaldo approached the Delhi high court, which directed NTPC not to open the commercial bids until it decided on the matter.
  • The court subsequently decided to allow Ansaldo to bid for the boiler part of the order, which NTPC is now contesting in the Supreme Court.
  • Judgement in the case, under trial since March 2011, has been reserved by the apex court.
  • “Bulk tendering was initiated by government of India to encourage domestic equipment manufacturing and the entire process was started in the year 2008. NTPC’s capacity addition target for the 11th Plan is 9,220MW, which we are likely to exceed. 12th Plan target is being finalized by government of India,” the NTPC spokesperson said.
  • India’s track record in adding power generating capacity is poor. The government is set to miss a revised target of 62,374MW and will only be able to add 52,000MW by the end of March. The original target was 78,577MW. In the five years to 2007, the country added 20,950MW of capacity, against a target of 41,110MW.

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