Government of Jharkhand has requested the Damodar Valley Corporation to take over the distribution of power in the five districts of Hazaribag Koderama Gridih, Dhanbad and Bokaro.
DVC in its 591st meeting considered the confidential note of Government of Jharkhand and has decided to conduct a system study by engaging a consultant, which will be followed by expression of interest. The work of power distribution can be either on franchisee basis or through a joint venture route.
DVC is the only power company of the country which is doing the business of Generation transmission and Distribution of power in its areas as per DVC act.
According to a senior official DVC is already short of man power and it is not understood from where the manpower will come. The only alternative left for DVC will go for joint venture where the private company will earn all the profits and DVC will provide the necessary infrastructure at Governments expenses.
A senior official said on condition of anonymity that Jharkhand Government is giving its revenue earning areas on franchisee how shall it survive with the remaining loss making areas.
It may be mentioned that, DVC floated a host of tenders in last three years for adding 5,200 mw, of which 2,500 mw was supposed to have come up by March 2010 for supplying to the Commonwealth Games. But not a single megawatt has been added so far.
DVC, currently a 2,854 MW company, aimed at becoming a 10,000-mw company by 2012 and be the country's second largest power generator after NTPC.
Even banking on power from DVC for the Commonwealth Games has proved to be a bad bet, it is not under stood hoe Jharkhand Government is banking on DVC.
Friday, 3 September 2010
Only suppliers with domestic manufacturing facility can bid for bulk supply orders to be placed by central utilities like NTPC and DVC
Private companies like Bharat Forge and L&T that are setting up power equipment manufacturing facilities under joint venture (JV) route run the risk of being at the mercy of their foreign technology suppliers for long, as the relevant agreements don’t provide them access to the know-why of the technologies.
Technological know-why is critical to absorbing a new technology and bringing down production cost.
The JVs are formed by these companies to benefit from the government’s policy designed to encourage domestic manufacturing capacity. Under these JVs, the Indian power equipment manufacturer will get the technological know-how from their respective foreign partners but not the know-why.
The government has stipulated the condition that only suppliers with domestic manufacturing facility can bid for bulk supply orders to be placed by central utilities like NTPC and Damodar Valley Corporation (DVC) for supercritical power equipment. The purpose is to encourage technology transfer for the indigenous power equipment manufacturing capacity.
That has forced international suppliers like Siemens, Alstom, Mitshubishi, Toshiba, Hitachi and Babcock & Wilcox to enter into technology collaboration agreements with Indian players to set up manufacturing facilities here.
However, the government’s policy does not mandate transfer of technological know-how under technology collaboration agreement. As a result, technology providers have excluded transfer of know-how from the scope of technology collaboration agreement.
Significantly, Bhel has been able to make improvement on original equipment procured from technology collaborators. This was made possible because it has access to both technological know-how and know-why.
The government has formulated the policy to expedite the pace of power generation capacity in the country. It is banking on private players to fill the gap in domestic demand and supply of power equipment. But given that private players will have to depend on their foreign partners for the supply of critical equipment, the government’s planning may go hay-wire.
Even if JV companies want to manufacture such equipment locally, it is unlikely they will succeed. It is because foreign partners who hold majority stake and management control of these JVs, may not encourage such moves.
Apart from Bharat Forge and L&T, BGR, JSW, Thermax and Cethar Vessels are also setting up manufacturing facilities for supercritical power equipment under the JV route. These companies are expected to make a combined investment of Rs 10,000 crore for setting up power equipment manufacturing facilities.
The government has envisaged introduction of supercritical power equipment on a large scale in coming years. Central utilities like NTPC and Damodar Valley Corporation (DVC) have been asked to issue tender for bulk procurement of supercritical equipment. While NTPC-DVC bulk tending for 660 mw units is underway, a similar tender for placing bulk orders for 800 mw units is likely to be issued soon.
What is more, these JV companies do not have the right to export power equipment to other countries. In case demand for power equipment sags in India, they will not be able to utilize their manufacturing capacity. That is a serious risk to their investment. Most of the Indian partners of these JVs are listed on the stock exchanges. That means investors who have bought shares of these companies are also exposed to the risks involved in investment made by them in JVs.
Technological know-why is critical to absorbing a new technology and bringing down production cost.
The JVs are formed by these companies to benefit from the government’s policy designed to encourage domestic manufacturing capacity. Under these JVs, the Indian power equipment manufacturer will get the technological know-how from their respective foreign partners but not the know-why.
The government has stipulated the condition that only suppliers with domestic manufacturing facility can bid for bulk supply orders to be placed by central utilities like NTPC and Damodar Valley Corporation (DVC) for supercritical power equipment. The purpose is to encourage technology transfer for the indigenous power equipment manufacturing capacity.
That has forced international suppliers like Siemens, Alstom, Mitshubishi, Toshiba, Hitachi and Babcock & Wilcox to enter into technology collaboration agreements with Indian players to set up manufacturing facilities here.
However, the government’s policy does not mandate transfer of technological know-how under technology collaboration agreement. As a result, technology providers have excluded transfer of know-how from the scope of technology collaboration agreement.
Significantly, Bhel has been able to make improvement on original equipment procured from technology collaborators. This was made possible because it has access to both technological know-how and know-why.
The government has formulated the policy to expedite the pace of power generation capacity in the country. It is banking on private players to fill the gap in domestic demand and supply of power equipment. But given that private players will have to depend on their foreign partners for the supply of critical equipment, the government’s planning may go hay-wire.
Even if JV companies want to manufacture such equipment locally, it is unlikely they will succeed. It is because foreign partners who hold majority stake and management control of these JVs, may not encourage such moves.
Apart from Bharat Forge and L&T, BGR, JSW, Thermax and Cethar Vessels are also setting up manufacturing facilities for supercritical power equipment under the JV route. These companies are expected to make a combined investment of Rs 10,000 crore for setting up power equipment manufacturing facilities.
The government has envisaged introduction of supercritical power equipment on a large scale in coming years. Central utilities like NTPC and Damodar Valley Corporation (DVC) have been asked to issue tender for bulk procurement of supercritical equipment. While NTPC-DVC bulk tending for 660 mw units is underway, a similar tender for placing bulk orders for 800 mw units is likely to be issued soon.
What is more, these JV companies do not have the right to export power equipment to other countries. In case demand for power equipment sags in India, they will not be able to utilize their manufacturing capacity. That is a serious risk to their investment. Most of the Indian partners of these JVs are listed on the stock exchanges. That means investors who have bought shares of these companies are also exposed to the risks involved in investment made by them in JVs.
Prime minister Manmohan Singh has given his approval on ouster of Biswas
Eight months after the Union power ministry ordered the ouster of Subrata Biswas from the post of Damodar Valley Corporation chairman following the Central Vigilance Commission's (CVC's) corruption charges against him, prime minister Manmohan Singh has given his approval.
The power ministry removed Biswas from the post of DVC chairman on November 27, last year after the CVC raised objections to his appointment through a letter dated October 20, 2009. Biswas was appointed chairman on October 14, 2009, ten months after Asim Barman retired from the post.
The Prime Minsiter's office on July 12 this year finally circulated a confidential note (PMO ID NO- 905/5/c/97/2009-pol-5) mentioning: "Prime Minister has approved the proposal of pre-mature repatriation of Shri Subrata Biswas, IAS.( KL: 85), Chairman, Damodar Valley Corporation to his parent cadre Kerala." (Fe has a copy of the note).
In fact, the Cabinet committee on appointments, headed by the Prime Minister himself, appointed Biswas as chairman without taking CVC clearance, which is mandatory for such ranks. The CVC wrote to the Union power ministry that there were three disciplinary proceedings against Biswas and that " it was not understood how the power ministry made such appointment without taking CVC clearance." Fe had reported this first on November 13, 2009.
Finally, in July this year, following the PMO's instructions, the power ministry has asked its chief vigilance officer (CVO) Devendra Singh to take additional charge of DVC replacing Biswas. This, according to a section of officials, is enough indication that the ministry will now dig into the irregularities that have been taking place in the statutory body.
In June, Manas Bhuian, the Congress leader of opposition in the West Bengal State Legislative Assembly, wrote to Biswas ( letter available with Fe) that there were irregularities going on in the tendering process for evacuation of ash and that two contractors " have been able to convince the DVC management to change QR (qualifying requirement)."
In fact, DVC has been floating a host of tenders since end of 2008 for adding 5,200 mw, of which 2,500 mw was supposed to have come up by March 2011 for supplying to the Commonwealth Games. But not a single megawatt has been added so far.
DVC was supposed to commission Chandrapura-7 (250 mw) and Chandrapura- 8 (250 mw) in September 2009 and March 2010 and units one and two (2x500 mw) of Mejia-2 in April and July, 2010.
But none of these units has come as yet though work orders for all these projects have been placed on time.
Officials said that there have been manipulation of all the tenders and at least 2000 work orders of various nature have been placed in the past two years on a single tender basis. Biswas prior to being appointed as the chairman was the secretary of DVC for five years.
The present chairman, Devendra Singh, when asked didn't want to comment on the irregularities.
However, a power ministry official admitted that all projects are behind schedule, including two units of Durgapur Steel Thermal Power Station (2x500 mw), one unit of Bokaro -A, units one and two (2x500 mw) of Koderma and units one and two (2x600 mw) of Raghunathpur. The power ministry will now push through these projects.
DVC, currently a 2,854 mw company, aimed at becoming a 10,000 mw company by 2012 and be the country's second largest power generator after NTPC.
But that's an impossible target now. Even banking on power from DVC for the Commonwealth Games has proved to be a bad bet, the ministry official said.
The power ministry removed Biswas from the post of DVC chairman on November 27, last year after the CVC raised objections to his appointment through a letter dated October 20, 2009. Biswas was appointed chairman on October 14, 2009, ten months after Asim Barman retired from the post.
The Prime Minsiter's office on July 12 this year finally circulated a confidential note (PMO ID NO- 905/5/c/97/2009-pol-5) mentioning: "Prime Minister has approved the proposal of pre-mature repatriation of Shri Subrata Biswas, IAS.( KL: 85), Chairman, Damodar Valley Corporation to his parent cadre Kerala." (Fe has a copy of the note).
In fact, the Cabinet committee on appointments, headed by the Prime Minister himself, appointed Biswas as chairman without taking CVC clearance, which is mandatory for such ranks. The CVC wrote to the Union power ministry that there were three disciplinary proceedings against Biswas and that " it was not understood how the power ministry made such appointment without taking CVC clearance." Fe had reported this first on November 13, 2009.
Finally, in July this year, following the PMO's instructions, the power ministry has asked its chief vigilance officer (CVO) Devendra Singh to take additional charge of DVC replacing Biswas. This, according to a section of officials, is enough indication that the ministry will now dig into the irregularities that have been taking place in the statutory body.
In June, Manas Bhuian, the Congress leader of opposition in the West Bengal State Legislative Assembly, wrote to Biswas ( letter available with Fe) that there were irregularities going on in the tendering process for evacuation of ash and that two contractors " have been able to convince the DVC management to change QR (qualifying requirement)."
In fact, DVC has been floating a host of tenders since end of 2008 for adding 5,200 mw, of which 2,500 mw was supposed to have come up by March 2011 for supplying to the Commonwealth Games. But not a single megawatt has been added so far.
DVC was supposed to commission Chandrapura-7 (250 mw) and Chandrapura- 8 (250 mw) in September 2009 and March 2010 and units one and two (2x500 mw) of Mejia-2 in April and July, 2010.
But none of these units has come as yet though work orders for all these projects have been placed on time.
Officials said that there have been manipulation of all the tenders and at least 2000 work orders of various nature have been placed in the past two years on a single tender basis. Biswas prior to being appointed as the chairman was the secretary of DVC for five years.
The present chairman, Devendra Singh, when asked didn't want to comment on the irregularities.
However, a power ministry official admitted that all projects are behind schedule, including two units of Durgapur Steel Thermal Power Station (2x500 mw), one unit of Bokaro -A, units one and two (2x500 mw) of Koderma and units one and two (2x600 mw) of Raghunathpur. The power ministry will now push through these projects.
DVC, currently a 2,854 mw company, aimed at becoming a 10,000 mw company by 2012 and be the country's second largest power generator after NTPC.
But that's an impossible target now. Even banking on power from DVC for the Commonwealth Games has proved to be a bad bet, the ministry official said.
CIL and Damodar Valley close to finalizing JV structure
The consortium of BEML, Coal India Ltd and Damodar Valley Corporation is understood to have reached at a settlement
over the equity structure of the joint venture company that will run the Durgapur-based Mining and Allied Machinery
Corporation.
In July, the consortium acquired the assets of the closed facility from the High Court appointed liquidator at a consolidated
sum of INR 100 crore.
According to sources in the consortium, as against the originally proposed equity structure of 48:26:26 between BEML, CIL
and DVC, the consortium partners have now settled for 50:25:25. However, the agreement is yet to be firmed up.
After acquisition of the assets (by the consortium), BEML had asked for a majority 51 per cent stake in the proposed venture.
The proposal was opposed by both CIL and DVC on the ground that such a move would convert the venture into a subsidiary
of BEML, thereby reducing the role of the partners to mere investors.
It now appears that by offering 50% stake to BEML, the consortium is trying to strike a middle path. In the new scheme of
things, both CIL and DVC would bring down their stakes below the critical 26%. Though BEML is being offered a higher
stake, the venture would not be regarded as a subsidiary of the mining equipment major.
According to sources, the latest proposal would also ensure that DVC and CIL two major users of mining and earth moving
equipment in the eastern region of the country can place orders with the venture on nomination basis. DVC is a major power
generation outfit with captive coal mines in the region.
over the equity structure of the joint venture company that will run the Durgapur-based Mining and Allied Machinery
Corporation.
In July, the consortium acquired the assets of the closed facility from the High Court appointed liquidator at a consolidated
sum of INR 100 crore.
According to sources in the consortium, as against the originally proposed equity structure of 48:26:26 between BEML, CIL
and DVC, the consortium partners have now settled for 50:25:25. However, the agreement is yet to be firmed up.
After acquisition of the assets (by the consortium), BEML had asked for a majority 51 per cent stake in the proposed venture.
The proposal was opposed by both CIL and DVC on the ground that such a move would convert the venture into a subsidiary
of BEML, thereby reducing the role of the partners to mere investors.
It now appears that by offering 50% stake to BEML, the consortium is trying to strike a middle path. In the new scheme of
things, both CIL and DVC would bring down their stakes below the critical 26%. Though BEML is being offered a higher
stake, the venture would not be regarded as a subsidiary of the mining equipment major.
According to sources, the latest proposal would also ensure that DVC and CIL two major users of mining and earth moving
equipment in the eastern region of the country can place orders with the venture on nomination basis. DVC is a major power
generation outfit with captive coal mines in the region.
Friday, 20 August 2010
The Supreme Court today directed DVC
New Delhi, Aug 17 (PTI) The Supreme Court today directed Damodar Valley
Corporation (DVC) to give information on its accounts so that it can ascertain
whether electricity regulator CERC has properly fixed its power tariffs, based
on its expenditure and other inputs. A bench comprising Chief Justice S H
Kapadia and Justice K S Radhakrishnan said it would look into the accounts of
the DVC and some other power producers to examine whether the CERC had validly
fixed tariff for the April, 2006-March, 2009, period. "We have to go into your
account books to examine the issue. Please prepare a chart and submit us by next
hearing, so that we could interpret it," the court said. Moreover, the apex
court, which had stayed the order of power tribunal APTEL to refund Rs 3,000
crore alleged extra tariff collected by the DVC, said the rate of tariff of the
power generator would be subject to the outcome of the petition. "The rate of
tariff of DVC would be subject to the outcome of the petition," the bench said.
DVC was represented by Attorney General G E Vahanvati and Solicitor General
Gopal Subramanium. The Appellate Tribunal for Electricity had held that DVC had
collected in excess of the price determined by power regulator CERC and directed
it to refund the ''extra tariff'' collected between April, 2006, and March,
2010, in an order passed on May 10, 2010. According to the DVC petition, Central
Electricity Regulatory Commission (CERC) had not taken into account the
additional cost inputs of the company while fixing the tariff for December,
2006. The additional input costs, according to the DVC, included a revision of
salaries of DVC employees as per the Sixth Pay Commission, payment of gratuity
and pension, money spent on enhancing generating units and opening of new
blocks. When the tariff fixed by the CERC was first challenged by the DVC before
APTEL on November, 2006, it had directed the CERC to determine it afresh.
Following this, CERC had again decided the tariff on August, 2009, and,
rejecting DVC''s claims, directed it to refund Rs 3,000 crore to consumers. When
DVC took up the matter before APTEL again, the tribunal ruled in favour of the
CERC and directed the corporation to refund the amount. According to the DVC,
the CERC had allowed only an amount of Rs 3,777 crore against its total claim of
Rs 8,483 crore for that period -- leaving a huge gap of Rs 4,706 crore. It
stated that more than 55 per cent of its claim was disallowed by the CERC.
Challenging this, DVC requested the Supreme Court to "allow its appeal and set
aside the judgment passed by APTEL and remit the matter back to CERC for
redetermination of tariff as per its direction." PTI
Corporation (DVC) to give information on its accounts so that it can ascertain
whether electricity regulator CERC has properly fixed its power tariffs, based
on its expenditure and other inputs. A bench comprising Chief Justice S H
Kapadia and Justice K S Radhakrishnan said it would look into the accounts of
the DVC and some other power producers to examine whether the CERC had validly
fixed tariff for the April, 2006-March, 2009, period. "We have to go into your
account books to examine the issue. Please prepare a chart and submit us by next
hearing, so that we could interpret it," the court said. Moreover, the apex
court, which had stayed the order of power tribunal APTEL to refund Rs 3,000
crore alleged extra tariff collected by the DVC, said the rate of tariff of the
power generator would be subject to the outcome of the petition. "The rate of
tariff of DVC would be subject to the outcome of the petition," the bench said.
DVC was represented by Attorney General G E Vahanvati and Solicitor General
Gopal Subramanium. The Appellate Tribunal for Electricity had held that DVC had
collected in excess of the price determined by power regulator CERC and directed
it to refund the ''extra tariff'' collected between April, 2006, and March,
2010, in an order passed on May 10, 2010. According to the DVC petition, Central
Electricity Regulatory Commission (CERC) had not taken into account the
additional cost inputs of the company while fixing the tariff for December,
2006. The additional input costs, according to the DVC, included a revision of
salaries of DVC employees as per the Sixth Pay Commission, payment of gratuity
and pension, money spent on enhancing generating units and opening of new
blocks. When the tariff fixed by the CERC was first challenged by the DVC before
APTEL on November, 2006, it had directed the CERC to determine it afresh.
Following this, CERC had again decided the tariff on August, 2009, and,
rejecting DVC''s claims, directed it to refund Rs 3,000 crore to consumers. When
DVC took up the matter before APTEL again, the tribunal ruled in favour of the
CERC and directed the corporation to refund the amount. According to the DVC,
the CERC had allowed only an amount of Rs 3,777 crore against its total claim of
Rs 8,483 crore for that period -- leaving a huge gap of Rs 4,706 crore. It
stated that more than 55 per cent of its claim was disallowed by the CERC.
Challenging this, DVC requested the Supreme Court to "allow its appeal and set
aside the judgment passed by APTEL and remit the matter back to CERC for
redetermination of tariff as per its direction." PTI
Sunday, 8 August 2010
An IAS officer of the 1985 batch, Biswas has been sent back to his parent Kerala cadre
July 21: The power ministry has removed Damodar Valley Corporation chairman Subrato Biswas from office.
An IAS officer of the 1985 batch, Biswas has been sent back to his parent Kerala cadre. He will now report to the Kerala chief secretary.
A new chairman for the DVC is yet to be decided as Union power minister Sushil Kumar Shinde is not in Delhi.
Biswas became the DVC chairman on October 13, 2009. He was to continue in office till May 21, 2011, when his five-year central deputation tenure was scheduled to expire.
On October 20, 2009, the Central Vigilance Commission had objected to Biswas’ appointment as the mandatory clearance from the commission was not sought.
Biswas had been accused of mismanagement and alleged acts of corruption. He had ordered the shifting of the Koderma units to Ranghunathpur and was allegedly indifferent to the problems at the Chandrapura thermal power station.
The DVC is also unlikely to supply 2,500MW power to the Commonwealth Games. Only the 500MW Mejia unit is scheduled to come up in August. “All the other projects will be commissioned after October 2010,” said Padamjit Singh, chairman of the All India Power Engineers’ Federation.
A couple of months back, Biswas was summoned by the speaker of the Jharkhand assembly and asked to submit a report on the DVC’s development work in the state.
Representatives of various parties had criticised the arrogance of the DVC management. According to sources in the power ministry, they had forwarded a draft chargesheet against Biswas to the department of personnel and training in May, recommending his repatriation to Kerala.
Earlier, the Central Vigilance Commission had imposed a “minor penalty” on Biswas in connection with the ash evacuation work of the Mejia thermal power station.
This is the second time the power ministry had recommended the repatriation of Biswas. The first transfer proposal was made in November 2009, which reached the PMO in December
An IAS officer of the 1985 batch, Biswas has been sent back to his parent Kerala cadre. He will now report to the Kerala chief secretary.
A new chairman for the DVC is yet to be decided as Union power minister Sushil Kumar Shinde is not in Delhi.
Biswas became the DVC chairman on October 13, 2009. He was to continue in office till May 21, 2011, when his five-year central deputation tenure was scheduled to expire.
On October 20, 2009, the Central Vigilance Commission had objected to Biswas’ appointment as the mandatory clearance from the commission was not sought.
Biswas had been accused of mismanagement and alleged acts of corruption. He had ordered the shifting of the Koderma units to Ranghunathpur and was allegedly indifferent to the problems at the Chandrapura thermal power station.
The DVC is also unlikely to supply 2,500MW power to the Commonwealth Games. Only the 500MW Mejia unit is scheduled to come up in August. “All the other projects will be commissioned after October 2010,” said Padamjit Singh, chairman of the All India Power Engineers’ Federation.
A couple of months back, Biswas was summoned by the speaker of the Jharkhand assembly and asked to submit a report on the DVC’s development work in the state.
Representatives of various parties had criticised the arrogance of the DVC management. According to sources in the power ministry, they had forwarded a draft chargesheet against Biswas to the department of personnel and training in May, recommending his repatriation to Kerala.
Earlier, the Central Vigilance Commission had imposed a “minor penalty” on Biswas in connection with the ash evacuation work of the Mejia thermal power station.
This is the second time the power ministry had recommended the repatriation of Biswas. The first transfer proposal was made in November 2009, which reached the PMO in December
Tuesday, 15 December 2009
NTPC to hire 1,300 people by the next fiscal
New Delhi: The country's largest power producer NTPC today said it plans to recruit about 1,300 people in the next fiscal to support the company's ambitious target of becoming a 50,000-MW company by 2012.
The company, which hired 1,050 people in the previous financial year (2008-09), has so far added a headcount of 900 and would hike this figure to 1,100 by the end of the fiscal.
"Since we are expanding and we want to become a 50,000 MW company by 2012 we need 1,200-1,300 people in the next financial year (2010-11)," Director HR NTPC R C Shrivastava told PTI.
"For every 4,000 MW we need around 1,600 people both executive and non-executive," Shrivastava said adding that the 1,300 target is on very conservative side, it may be higher.
The company, which hired 1,050 people in the previous financial year (2008-09), has so far added a headcount of 900 and would hike this figure to 1,100 by the end of the fiscal.
"Since we are expanding and we want to become a 50,000 MW company by 2012 we need 1,200-1,300 people in the next financial year (2010-11)," Director HR NTPC R C Shrivastava told PTI.
"For every 4,000 MW we need around 1,600 people both executive and non-executive," Shrivastava said adding that the 1,300 target is on very conservative side, it may be higher.
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