Volumes to grow substantially by 2013: PTC

PTC India recently entered into a long-term MOUs for 32,000 MW. Power purchase agreements for 9500 MW have been signed.  The joint venture between FT (Financial Technologies) and PTC saw a significant jump in the volumes, which were 13000 MW on June 27. NTPC, PFC, TCS are starting rival power exchange. PTC plans to diversify into the coal business and to create USD one billion of funds for the acquisition of overseas coal blocks. It will set up an overseas arm for this acquisition and will put Rs 300 crore in the fund. 
 
TN Thakur, Chairman, PTC India informed CNBC-TV18 that around 400MW of the 9500 MW capacity would be commissioned from the long-term contracts in FY09. He said “The company is now poised for better volumes in the current financial year and the future as projects are getting commissioned”. He sees substantial growth in the volumes of PTC by 2013.

Excerpts from CNBC-TV18’s exclusive interview with TN Thakur:

Q: The most recent news on the company is that you have entered into long term MoUs for a total capacity of about 32,000 MW. You have also entered into a very significant power purchase agreements of 9,500 MW. What is the total generation that you would be looking at in FY09 and what’s the outlook for FY10?

A: 100MW will get commissioned of the 9,500 MW we have signed, this financial year and another 300MW will also be commissioned. So altogether, around 400MW will be commissioned from the long-term contracts. 

Meanwhile, we have also sent some medium-term contracts. Utilities have agreed to make power available to us for 3-5 years at a time. However, the prices will be determined each season, in the competitive market. So the volumes will mostly depend on these two factors.

We are also into short-term trading, so there will be some seasonal power coming to us from time to time from various sources. The company is now poised for better volumes in the current financial year and the future as these projects are getting commissioned.

Q: The first unit Lanco Amarkantak Project with the 300Mw capacity is expected to be operational in two months from now. What is the update there and what are the other plans that you have as far as medium capacity power plants are concerned?

A: We have signed a PPA (Power Purchase Agreement) with Lanco and we have also signed a power sales agreement with the Madhya Pradesh utility.

There was some problem regarding the state utility not having complied with one condition precedent, which has gone to the court. The court stayed the matter, which means that the agreement as of now are valid and have to be performed, that is the current situation. The project should get commissioned on time and if at all there is any delay it should not be for more than a month or so.
 
In addition to Lanco, we have also got some projects with long-term contracts from Orissa and one Goa, but these have smaller capacities. So that is why I said around 400Mw including Lanco will be getting commissioned in the current financial year.

Q: The longer term problem with the power sector is that a lot of projects get delayed. Since you are a power trading company, what exactly can the investors look forward to you form your company till about 2013 when all these power purchase agreements come into force?

A: It will be very difficult for anyone to make any projections. I am told that we are barred from making projections being a listed company. If you purely go by the agreements that we have signed, the way the market has been behaving in the past few years, and the way we perceive the market will be in the next few years. We see substantial growth in volumes of PTC by 2013. I will not make any projections, but it would be a substantial growth. The projects with which we are have an MoU or power purchase agreements are being commissioned in phases.

PTC is no longer a trading company, of course were called Power Trading Corporation and after the IPO we changed our name to PTC India, because we have gone into other segments of business and we are now a solutions provider on a holistic basis.

We have the PTC financial services, where we take equity and power projects. We are also trying to get into some debt syndication for the power projects. We recently another company called PTC Energy Ltd and we think that most of our asset based business will go into PTC Energy which means we have joint ventures with power project developers. We have also entered into a joint venture with a Singapore based company to source coal from Indonesia. So these are the different kinds of things, which we are now looking at.