Creation of this additional capacity is expected to increase NTPC's turnover by around Rs 500 crore. The corporation also plans to effect another increase of 500 mw at this plant during 1999-2000. Once both units start supplying power, NTPC's revenue from the western region will cross the Rs 5,000 crore mark. At present, the region was the highest contributor with Rs 4,000 crore to the corporation's turnover of over Rs 14,000 crore during 1998-99.

The Vindhyachal unit was commissioned last month but as coal-based stations need around six months to begin commercial production from the date of commissioning, NTPC has started to put in place the required infrastructure primarily for coal supply. The plant was given the coal linkage from the Nigahi mine in MP.

The Vindhyachal expansionis part of the plan to meet NTPC's 30,000 mw capacity target set earlier. The corporation has planned to add 11,000 mw from its 11 ongoing capacity addition programmes. Vindhyachal was partially funded by the World Bank which provided $400 million to NTPC largely for its 1000 mw Vindhyachal stage-II and the 1,700 mw Kayamkulam power stations in Kerala.

This capacity addition will give relief to Maharashtra, Madhya Pradesh and Gujarat which draw significant power from the station. Meanwhile, NTPC has envisaged an investment of around Rs 2,510 crore during the current year for its ongoing expansion programme of which Rs 650 crore will be through ECBs. The balance will be raised through internal accruals and from domestic market.

NTPC has already raised about $120 million through a syndicated foreign currency term loan arranged by the State Bank of India for financing the capital expenditure of the on-going projects. The corporation also plans to diversify into other related areas. It has already set up ajoint venture, Utility Powertech, with the Mumbai-based BSES to undertake equipment, procurement and construction (EPC) works for power projects.

Insight

Surviving strength
All the three SEBs that the plant will serve are bankrupt. Consequently NTPC's problem of mounting receivables will only worsen. However, NTPC's bottomline (although not the cash-flow) will be better because from September 1998 onwards, RoE of 16 per cent is allowed instead of 12 per cent. With receivables (including surcharge) exceeding Rs 10,100 crore as on April 1999, it is a tribute to NTPC that it is still operational.