Damodar Valley Corporation (DVC) is all geared up for major expansion. The state-owned power company proposes to invest Rs40,000 crore ($10 billion) in the next four years. The entity is also weighing an option to go public with of an initial public offer to raise funds next year, union minister of state for power Jairam Ramesh said in Kolkata yesterday.. He outlined ambitious targets for the multi-purpose river project. He said, ''The DVC is to achieve a remarkable growth during the next four years with its installed capacity reaching 11,000 MW from the current 2,400 MW by 2012. Out of this total 11,000 MW capacity, 99 per cent would be coal based.'' For this financial year, DVC proposes to commission 750 MW of power units as compared to 250 MW in 2007-2008. The first unit having a capacity of 250 MW will be commissioned at Mejia on 15 May and two more 250 MW units will be commissioned at Chandrapura - one on 20 August and the other in the last week of December, the minister said. Talking about the expansion programme, he said that DVC would require a total investment of Rs40,000 crore ($10 billion) in the next four years and for that it would have to borrow capital from the Power Finance Corp, Rural Electrification Corp and commercial banks. He also spoke of plans to tap the capital markets through a special purpose vehicle (SPV) or a wholly owned subsidiary. Going into specifics, he said that though DVC in its present form is not eligible to raise public funds, it has appointed auditing and consultancy major KPMG to recommend the measures to restructure the organisation, a task it expects to be completed by the end of this year. An agreement was signed between DVC and KPMG in January 2008, according to which KPMG will be responsible for recommending ways and means for restructuring DVC, thereby facilitating compliance of all legal formalities for the same, and finally determine the issue size, timing and other details pertinent to the IPO. Elaborating on the issue, the Chairman of DVC, Asim Burman, said, ''The KPMG recommendations on creation of a new structure without requiring any amendment to the existing DVC Act are expected to be tabled in end-May, following which we will seek the board's approval for the requisite restructuring.'' As for a possible time frame for the IPO, he said that pursuant to the company board's approval, government sanction would be sought after which filing procedures could start. He expected a lag of four months after the government approval to hit the capital markets. The minister said that the capacity addition will take place at DVC's power plants at Mejia, Chandrapura, Bokaro, Durgapur, Koderma, Raghunathpur and Maithon. Ramesh said that 20 per cent of this additional power generated by DVC will be transmitted to New Delhi. In the last three to four years, DVC's plant load factor has gone up from 59 per cent to 75 per cent and this is expected to reach around 80 per cent in 2008-09. He added that DVC would set up a world-class research and development centre at Rajarhat Township near Kolkata, in collaboration with the Indian Institute of Technology (IIT) Kharagpur, at an investment of Rs.100 crore, for which land has already been acquired.
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