Bidding conditions need to structurise for sharing fuel related risks

Bidding conditions need to structurise for sharing fuel related risks“Recent order by CERC is a pragmatic approach towards resolving the log jam that we have seen in various cases in the power sector today,” said Hemant Kanoria, Chairman, DPSC Ltd.
In the current economic scenario, the power sector is facing severe impediments to growth. Even the coal sector today appears to be facing a combination of issues related to development delays of mines, production inefficiencies as well as hurdles in transportation. Then there is adding cost which only hardens the growth of the sector. In an exclusive chat, Hemant Kanoria shares his insights about the power sector.
Could you take us through the journey of DPSC Ltd and its current position?DPSC Ltd., formerly Dishergarh Power Supply Company, incorporated in 1919 in West Bengal, is one of the oldest power utility companies in India. The company was set up primarily to supply power to the Bengal Coal Company, then the largest producer of coal in Asia, to serve the domestic and industrial needs in Asansol-Ranigunj belt in West Bengal. DPSC supplies power to critical industries like collieries, underground mines, state electricity boards, railways, hospitals and so on. Some of our customers include BCCL, DVC, ECL, IISCO, WBSEB, public health engineering and various public utilities.An Andrew Yule company, DPSC went for disinvestment in 2009-2010 and was taken over by India Power Corporation Ltd., which is into renewable energy generation. Since then the group has supported the rapid industrialisation of West Bengal. DPSC is into power generation and distribution. The company has an operating capacity of 12 MW of thermal generation in West Bengal and 100 MW of wind power in Gujarat, Karnataka and Rajasthan. It has a license to distribute power in the industrial belt of Asansol-Ranigunj in an area of 618 sq. km.
DPSC reported a PAT of `11.8 crore for FY12, which is a jump of 108 per cent from FY11. Our net sales were at `538.73 crore up 33 per cent from `405.63 crore reported in FY11. For 9 months in the FY13, DPSC has reported PAT of `12.41 crore and net sales of `434 crore.
What is your current generation capacity and what are your expansion plans?DPSC has embarked its integration process through an amalgamation of IPCL into DPSC. Post merger of the two companies, the group will emerge as an integrated player in the power sector with operations in generation, T&D and power trading. The combined generation capacity of DPSC-IPCL is 110 MW currently.
In the distribution sector, the group is looking to expand its presence to regions beyond the current 618-sq.-km. license area in the Ranigunj-Asansol region. In the last 2 years, the connected load has increased from 100 MVA to 250 MVA and the company is targeting a connected load of 1,000 MVA by 2016. The company plans to set up 400KV and 220KV substations for the required connectivity with the state and national grid in the near to long term.In the generation sector, IPCL-DPSC combine has envisioned a substantial increase in capacity to around 1,300 MW by 2016, 300 MW from renewable sources and another 1,000 MW through thermal power. The company’s 450 MW plant at Haldia is already under implementation and is expected to start in early 2015. Its 540 MW thermal power plant at Raghunathpur is also under development.
The company has also signed MoUs with several state governments for setting up generation plants of 1,320 MW in Bihar and Gujarat each and another 660 MW in Madhya Pradesh. The company is achieving statutory approvals for the same and land identification is in process.
How much are you going to invest to realise your future expansion plans?DPSC plans to invest around of `25,000 crore over the next few years to fulfil its future expansion plans
What is the status of your thermal power plants being set up at Haldia and Raghunathpur in West Bengal?At Haldia, we are setting up a 3×150 (450 MW) thermal power plant with a capex of around `2,475 crore. About 198 acres of land has already been acquired and civil work is under progress. BoP work is being carried on by Bharat Forge and BTG has been sourced from BHEL.

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