To add five projects in FY11: NHPC

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To add five projects in FY11: NHPC

SK Garg, CMD, NHPC, says there is no under-recovery from Dulhasti. "The project is making profit." For FY11, he says the company is going to add five projects. He also does not see any further equity raising requirements.

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NHPC has announced its third quarter results of FY10. Its net profit declined 5.7% to Rs 582 crore, on quarter-on-quarter basis (QoQ). Its Net sales went up 1.5% at Rs 1,213 crore (QoQ).

SK Garg, CMD, NHPC, says there is no under-recovery from Dulhasti. "The project is making profit."  For FY11, he says the company is going to add five projects. He also does not see any further equity raising requirements.

Here is a verbatim transcript of the exclusive interview with SK Garg on CNBC-TV18. Also watch the accompanying video.

Q: Clarification on the cost under recovery that you have been facing at the Dulhasti unit. Because of Central Electricity Regulatory Commission's (CERC) tariff order changes will you no longer have to face that under recovery?

A: I would like to tell you in case of Dulhasti, which has been commissioned in March 2007, though there was a cost of warrant which has been cleared by CCA also. Arising out of this we had taken with CERC, now we are glad to say that this year they have given their final tariff rate. Arising out of this we have been able to clock net profit of almost Rs 610 crore, exclusively on account of the revision in the tariff effective 1-4-2007 on account of Dulhasti commissioning.

Q: From this year and next year onwards the Dulhasti under recoveries do not exist now, you continue to function without that handicap?

A: That's correct, there is no under recovery as such. In fact Dulhasti is one of the best projects which we have got in our stable right now. We are getting quite good profit out of Dulhasti commissioning. At present there is no under recovery as such, we are confronting.

Q: Can you update us on how the new capacity additions that you are expected to bring in over the next few years are progressing because last we spoke to you; you did mention some problems for which you would miss the current plan target?

A: For the year 2009-10, I am happy to say that Sewa-II, which I earlier mentioned that we are likely to commission in January-February, we are on schedule. All the three machines have been spin during last two-three days and we are hoping to put it on a commercial use by the end of February 2010, so it is coming on schedule.

As regards to other five projects, we are going to commission in the year 2010-11 with the capacity of around 700 megawatts (MW). Then in 2011-12, that is the last year of this Five Year Plan, we are going to commission two full projects and partly one Subansiri Lower also adding another 1,400 MW. With this we are hoping that by the end of March 2012, this company will be able to give 7,500 MW capacities. In 2012-13, we will be able to add another 2,050 MW; 1,250 MW coming out of Subansiri partly and 800 MW coming out of Parbati-II in Himachal Pradesh. So with this we are hoping that by 2013 capacity of NHPC will be something like 9,500 MW.