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Railways and NTPC in power deal

The Railways will ink a deal with the National Thermal Power Corporation for setting up its first joint venture power plant, reports Hemendra Singh Bartwal.

business Updated: Nov 06, 2007 04:22 IST
Hemendra Singh Bartwal

The Railways will ink a deal with the National Thermal Power Corporation (NTPC) for setting up its first joint venture power plant.

This will enable the railways to cut down considerably on its heavy expenditure of buying power from state electricity boards for running trains and other related activities.

This development follows a decision taken by the Railway Ministry to set up several power plants in collaboration with the NTPC to meet its power supply needs at cheaper rates than that being charged by others. The railways spend Rs 5,700 crore annually on electricity.

When its first 1,000 MW capacity power plant, proposed to be set up in Nabinagar, Bihar, becomes operational, the organisation will save between Rs 400 crore and Rs 600 crore every year, a senior official in the ministry said.

The joint venture agreement will be signed in the presence of Railway Minister Lalu Prasad Yadav and Power Minister Sushil Kumar Shinde on Tuesday.

The power generated at the Bharatiya Rail Bijlee Company Ltd in Nabinagar will be utilised by 164 traction sub-stations in the eastern and western regions.

The cost of the project will be Rs 5,352 crore of which 70 per cent would be raised through loans. The rest would come in the form of equity in which NTPC’s contribution will be 74 per cent and the railways 26 per cent.