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| Railways’ bold step, goes ... |
| Railway overhead electric traction work under progress in Chennai.
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| INDIA
, 9-November-2007
23:9:52 PM |
| In another bold step to cut operational costs and improve efficiency, the Indian Railways has signed an agreement with the National Thermal Power Corporation (NTPC) to set up a 1,000 MW captive power plant at Nabinagar in Bihar. The NTPC will have a 74 per cent stake in the Rs. 5,352 crore project, which will be taken up on a 70:30 debt equity basis.
In 2000, the Railways started drawing power from the NTPC’s Dadri and Auriya power plants under a Central scheme to provide the Railways a share from the 15 per cent unallocated power from the Central share of electricity in its undertakings. That arrangement alone resulted in an annual saving of Rs. 50 crore to the Railways, because of the cheaper cost of power.
Over the years, the Railway Board has been repeated urging State governments to supply power from the State electricity boards (SEBs) at a concessional tariff. Except a few States such as Kerala, not many came forward to do that.
Cost of production
Consequently, the Railways decided to go in for captive power plants through joint ventures.
According to the Railway Board, the Nabinagar plant can lead to a saving of Rs. 400-600 crore annually. The cost of production in the unit has been estimated at Rs. 2.13 a unit, and along with wheeling and transmission charges, it will cost the Railways somewhere between Rs. 3.38 and Rs. 3.63 a unit.
That works out much cheaper than the average cost of electricity, which is now Rs. 4.28, to the Railways. This joint venture with the NTPC, therefore, promises to be just the first of such projects by the Railways to cut down its operational costs.
The annual power bill of the Railways is estimated at Rs. 5,700 crore for the 18,000 route km of electric traction in its 63,000 route km network across the country. Railway sources say that though diesel locomotive may work out cheaper than electric transmission costs
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