Expect to restart Dhauliganga project by FY14-end: NHPC

State-owned NHPC’s financial performance is under stress, says ABL Srivastava, Director Finance. According to him, the company’s results for the first six months show a decline due to flood-led losses in its 280 MW Dhauliganga hydro power project in Uttarakhand. The company hopes to restart the project by FY14-end.

Going ahead, the company will try to recover its business loss for the Dhauliganga project. So far, it has received only Rs 35 crore for account payment by the insurance companies, says Srivastava in an interview to CNBC-TV18. Below is the verbatim transcript of ABL Srivastava’s interview on CNBC-TV18 Q: Could you elaborate the key reasons for the weak generation in Q2, was it only on account of Dhauliganga or are there other factors as well?
A: This more than Rs 500 crore is because of Dhauliganga but more than Rs 300 crore is in respect of the other power stations where there has been less availability of the water. Mainly these power stations are situated on the Ravi River where we had faced less availability of water and these power stations are the Bairasiul, Chamera I, Chamera II and Chamera III. In respect of the other power stations, the generation has been by and large flat as compared to the previous year. Q: Reasons for the lack of availability of factor which you were citing, is it because Q2 is seasonally strong quarter for hydro companies and this time we even had a good monsoon?
A: You are correct that overall hydro generation in the first six months has been better than the corresponding period previous year as a whole. But unfortunately in respect of those power stations, which are with us, we have faced lesser availability of water problem particularly with regards to rivers, which are feeding water to us as mentioned in the case of Ravi and similarly in case of Jammu & Kashmir (J&K), Dulhasti projects. Q: When do you expect it to resume operations, you have told us in the past, it is very important for your company and the plant is adequately insured so the financial impact of it closing down because of the Uttarakhand problem will be minimal?
A: We are taking all possible steps to restart the project. We are confident that by the end of the current financial year we will be able to restart it. I cannot say that there will not be any financial impact. There will be less financial impact because the major process you have covered in the insurance policy but definitely insurance policy has some deductible clauses and financial impact to that extent will be there but that will not be material. Q: Due to unforeseen circumstances, the first half of the fiscal year has proved to be very challenging for the company, what is the company’s outlook on growth, both the sales as well as the profitability for the remaining part of this year?
A: The financial performance of the company is under stress. Our first six months results have been 2 percent down from the previous year. Because of the Dhauliganga effect and delay in the commissioning of some projects, which were expected to be commissioned in the first half will be coming in the second half, the profitability will not be to the extent which we were expecting earlier.
We will remain under stress but we are making all efforts to see whatever best can be done in the second half, we will try that Dhauliganga insurance issue gets resolved and we get payment in that although as of now we have received only Rs 35 crore on account payment and we have not received any amount against business loss.
We will try to get the business loss recovered within the current financial year from the insurance company in respect of Dhauliganga and that will reduce our gap to some extent. There are certain other measures we have taken so that the profitability which is under stress can be recouped to the best possible.