NHPC aims to complete 4 projects in FY12

ABL Srivastava, Director-Finance, NHPC in an interview with CNBC-TV18 spoke about the latest happenings in the company. The company would be investing Rs 2,400 crore for 2,120 megawatt projects in Jammu & Kashmir and has signed a pact with J&K PDC and PTC for the same (Click here for more).

He further said that though there are uncertainties which cause delays in completion of hydro projects the company targets to complete four projects this year. "During the current yea we are targeting to complete four projects these are the Chutak, Uri-II, Chamera III and Nimo Bazgo and one unit each of Parvati III and TLDP-III means 4 projects will be fully commissioned and two projects will be partly commissioned during the 11th Plan," he elaborated. Below is the verbatim transcript of his interview with Latha Venkatesh and Anuj Singhal of CNBC-TV18. Also watch the accompanying video. Q: Lets start with J&K investment where you will be investing Rs 2,400 crore. Could you give us some more details on that, when will this come on stream? A: Sometime back we had a signed MoU with J&K PDC, PTC and NHPC. The company has since been formed is the Chenab Valley Power Projects Limited. In this NHPC is holding 49%, 49% is with J&K PDC and 2% is with the PTC. There are three projects in this company with a capacity of 2,120 megawatt, roughly taking Rs 7 crore per MW the estimated cost of three projects will be Rs 15,000 crore. Keeping 30% equity component as per the Central Electricity Regulatory Commission (CERC) norms the total capital requirement will be Rs 4,500 crore. Out of this 49% roughly, Rs 2,400 crore will come from the NHPC side and the balance on the rest. The normal timeline for these projects is five -six years after getting all clearances. The three projects which we have earmarked for this company are Pakal Dul 1,000 MW, Kiru 600 MW and Kwar 520 MW Q: For this Rs 2,400 crore equity, will you have internal accruals to fund it? Not just equity once the debt all comes on stream what is the kind of debt equity ratio that we are looking at? A: The point is Rs 2,400 crore equity component which is to come up from NHPC will be contributed from the internal resources of the company. The NHPC cash accruals and internal resources are sufficient to take care of this Rs 2,400 crore over the years. As far as debt component of the 70% is concerned, this debt will be taken by the JVC company which has been formed. It will not be a dent on the balance sheet of the NHPC or JK PDC, but debt will be taken by this new company only. Q: There are constant fears that hydro projects get delayed. So how many projects will you commission in FY12 and if you can tell us whether delays will impact some of the revenue projection? A: Sometimes in hydro there are uncertainties and due to one or the other reason there have been some delays. During the current yea we are targeting to complete four projects. These four projects are the Chutak, Uri-II, Chamera III and Nimo Bazgo and one unit each of Parvati III and TLDP-III. This means four projects will be fully commissioned and two projects will be partly commissioned during the 11th Plan. Q: Another constant complaint of your customers has been your RoE, your average RoE in FY11 has been pretty bad compared to your peers. How will RoE perform in FY12? Do we see an upward climb? A: There are projects to be commissioned during the current year nearly Rs 6,000 crore of the capital work in progress will be converted into the operational assets. On the capital work in progress there is no return and once they become the operational returns the RoE will improve as compared to the previous year. Q: Last time we spoke you indicated that there are 12 projects of 10,000 mw which are awaiting government clearances or approval. Has there been any progress on that? A: A definite timeline for getting the clearances of the projects cannot be given, we are pursuing them. In the last couple of months we have received some progress in some projects for example in the Kotli Behal 1A, which is 195 mw projects the forest clearance has been accorded. Similarly, in case of Tawang 1 the TEC has been cleared. We are also expecting TEC of Tawang 2 project very shortly that is the recent development which has taken place. In other cases persuasion is going on and we are waiting for the clearances to come. Q: Your FY11 revenue performance was flattish, how will FY12 look like and importantly will there been an improvement in generation targets? A: I slap back to disagree last year the performance was sluggish. In