Jairam Ramesh (left), minister of state for commerce and power, with DVC chairman A.K. Burman in Calcutta on Friday. Picture by Kishor Roy Chowdhury

Calcutta, April 18: The Damodar Valley Corporation (DVC) will take the subsidiary route to enter the capital markets. Jairam Ramesh, minister of state for commerce and power, today said the DVC, which was set up in 1948 under an act of Parliament, could not offer its equities to the public.

“The corporation will set up a wholly owned subsidiary soon and the subsidiary will come out with a public issue of shares,” Ramesh said.

The corporation has already appointed consultant KPMG to advise it on whether it should float project-specific special purpose vehicles (SPVs) or an umbrella company or a wholly owned subsidiary to offer equities to the public and raise money from the market.

“KPMG is expected to submit its report by the end of May. If the board of directors of the DVC approves the KPMG report, the subsidiary or the SPVs will be incorporated within four months,” said A.K. Burman, chairman of the DVC.

Given the recent turmoil in stock markets, which is expected to continue for a few more months, the DVC may tap the capital market next year.

The corporation has set a huge capacity expansion target in the Eleventh Five Year Plan (2007-12).

“In its 60 years of operations, the DVC’s achievement is not impressive at all. The total installed capacity of the corporation at present is about 2,400MW. By 2012, its total installed capacity will be 11,000MW.”

He added that in the current calendar year the DVC would add 750MW — Mejia (250MW) and Chandrapura (2x250MW). “The Mejia unit will be commissioned on May 15, one 250-MW unit at Chandrapura will take off on August 20 and another in December,” the minister said.

After the DVC puts in place a generation capacity of 11,000MW, it will supply 20 per cent of its total power to Delhi.

The addition of about 9,000MW capacity within the current plan period will involve an investment of Rs 40,000 crore, almost all of which will be invested in Jharkhand and Bengal.

“The DVC’s investment in Jharkhand will be Rs 16,000 crore and Rs 24,000 crore in Bengal,” Burman said.

MAMC revival

Bengal chief minister Buddhadeb Bhattacharjee has urged Prime Minister Manmohan Singh to waive the central government’s dues and loans worth Rs 750 crore vis-à-vis the Mining and Allied Machinery Corporation (MAMC).