State-run power generator NTPC has initiated due diligence of Damodar Valley Corporation’s Ragunathpur thermal plant, which it is likely to take over. The company is expected to place the proposal before its board soon. The Raghunathpur power station was to have two units of 600 MW each, one of which is ready. But the right of way for transporting water and coal has held up the project, which cannot start commercial production though DVC had run the plant temporarily after it was set up.
NTPC executives recently visited the facility to take stock of the situation, so that a formal discussion can be initiated between the two companies, people aware of the development said.
According to these people, the power ministry has asked NTPC to take over the Raghunathpur facility. DVC had built the units at a debt equity ratio of 70:30 and has been gradually moving towards a debt burden that it may not been able to service if the plant does not start generation soon.
The Raghunathpur project was part of DVC’s plan to raise its thermal power generation capability from around 3,000 MW to 10,000 MW over a period of 10 years.
The project got stuck as DVC could not acquire a patch of land on which it had planned to lay a water pipeline and set up a coal transport facility. This is, however, not the first time that NTPC is being asked to take over stuck thermal power projects. It has taken over West Bengal Government’s Katwa poject in Bardhaman as well as a couple of hydel power projects in the state. It has recently taken over Bihargovernment’s Patratu project through a 74:26 joint venture.