Indian Railways has signed a joint venture agreement with the National Thermal Power Corporation Ltd. (NTPC) to set up a 1000 MW captive power plant for the rqailways, Bhartiya Rail Bijlee Company Limited, at Nabinagar in Bihar.

Speaking on the occasion, the minister for railways Lalu Prasad said that nearly 18,000 route kilometer, out of more than 63,000 route kilometers of Indian Railways network, has already been electrified which constitutes 28 per cent of the total rail network carrying nearly 63 per cent of freight and 47.8 per cent of passenger traffic.

The minister said that Indian Railways was spending about Rs5,700 crore per annum for consumption on more than 13,000 million units of electricity towards electric energy for traction and non-traction purposes.

In order to derive full benefits of the ongoing reforms in power sector, the minister said that, a decision has been taken by the ministry of railways in consultation with the ministry of power to set up power projects in joint venture with National Thermal Power Corporation Ltd.

10 per cent of power from the Nabinagar power plant, to be built at a cost of Rs5352 crore, will be earmarked for other users.

The equity portions of NTPC and Indian Railways will be 74 per cent (Rs1,188 crore) and 26 per cent (Rs417 crore) respectively. Indian Railways expects to save approximately Rs600 crore per annum. The electricity from this plant will be utilised by Indian Railways for running electric trains in Bihar, Jharkhand, West Bengal, Chhatisgarh, Maharashtra, Gujarat and Madhya Pradesh in the eastern and western regions of the country. The minster said that setting up of such joint venture power project plants will benefit the nation as it would mean net addition to the generation capacity.

Union power minister Shushilkumar Shinde complimented the railways for its spectacular growth in the recent past in general and for the proactive initiative for the setting up of this power plant at Nabinagar in Bihar in particular. He added that this joint venture would be mutually beneficial for both the ministries of railways and power in view of the rising demand for power in the country. He further added that such cooperation would help pave the way for achieving the target of providing power to each household by the end of the 11th Plan period.

The joint venture agreement was signed by Sudheer Kumar, executive director (electrical energy management), ministry of railways and R S Sharma, director (commercial), NTPC.

Speaking on the occasion, K C Jena, chairman, Railway Board, said that as a precursor to this historic occasion for the first time in the 150 years of Railway history, a memorandum of understanding was earlier signed between Railways and NTPC on 18th February, 2002, for setting up of joint venture project and later on 1st February 2007, and the Cabinet Committee on Economic Affairs (CCEA) had approved the setting up of the joint venture company Bhartiya Rail Bijlee Company Ltd. at Nabinagar in Bihar.

The union cabinet has, in view of the unreasonably high tariff charged by SEBs, approved Indian Railways'' proposal for availing direct power supply from central generating agencies from the 15 per cent unallocated central share of power. Accordingly, the railways have availed power supply from Dadri and Auriya power plant of NTPC in November 2000 for Ghaziabad-Kanpur section of Northern Railway. Railways are saving about Rs50 crore per annum due to implementation of these schemes for availing direct power supply from NTPC / central generating agencies.