Calcutta, May 10: The proposed move to restructure Damodar Valley Corporation has sent a shock wave among senior officials of the power utility who feel that such a move will adversely impact the finances of the entity.
In February, the DVC board had discussed a proposal to transfer its high tension transmission and distribution system in Bengal, along with the canal irrigation system, to the state government.
The board formed a three-man committee comprising directors in its commercial, system and finance departments to hold discussions with the Bengal government on the merits and implication of the proposal.
While the committee is yet to submit its findings to the DVC board, executive director (system) T. Bandyopadhyay, in a communication to acting chairman Arup Roy Chowdhury on April 22, had expressed concern that the financial position of the central power utility could worsen if the proposal was implemented. Bandyopadhyay is a member of the three-man panel that is mandated to take forward the restructuring proposal.
According to senior DVC officials, the proposal would not only lead to the transfer of transmission and distribution assets worth Rs 1,700 crore to the Bengal government but would also see the corporation losing control over its canal irrigation system spread across 4,909 acres within the state.
Close to 75 per cent of the corporation’s monthly cash flow comes from its over 300 retail consumers comprising manufacturing units, subsidiaries of Coal India, Indian Railways and the state electricity boards of Bengal and Jharkhand.
“The total contract demand proposed to be handed over is around 1,479 MVA (1,479 MW) from which there is an average monthly consumer billing of Rs 261 crore and the level of realisation is 99.8 per cent,” a senior director of DVC said.
“Without the T&D system, it would be difficult to evacuate power for our generating units. Our financial position could further deteriorate,” he added.
Though DVC is saddled with Rs 29,000 crore debt, the power utility earns a profit of close to Rs 400 crore on an annual turnover of Rs 12,500 crore.
DVC officials feel that the proposed restructuring would reduce the corporation to a power generating company. “We would not only have to enter into power purchase agreement with the state government to evacuate power from our generation units, but would also have to purchase water for our own power plants,” a DVC official said.