World of Industries

INDIA's POWER INDUSTRY

Electricity, a basic minimum service that any citizen should get or for that matter the
industry for its development, witnessed severe fluctations in progress in 2009 in term
of capacity addition.

Altough, the country hopes to achieve 78,000MW in new generation capacity in the five
years ending 2012, the way things are moving now make this target look like a tall
order.

yes, the government has awarded four 4000-MW Ultra Mega Power Projects to developers,
but none of these are part of the eleventh five year plan target.

The country produces 1,55,859 MW of power as on November 30, this year, but nothing
can illustrate the slack pace of capacity adition better than the performance in the
last fiscal-the country was to add 11,061 MW in FY09 while it managed only 3,500 MW.


The return of the UPA government for a second straight term in office generated a lot
of expectations about the movement in this sector, but not many policy initatives came
by, resulting in a lacklustre performance.

The government has time and agian said that it would be able to add about 68,000-70,000
MW during the current plan period and has reiterated that with some effort, the goal of
78,000 MW can b realised. Mr.Sushil Kumar Shinde led power Minister has know set a target
of adding 13,000MW of electricity annualy for the next three years.

Even on the UMPP front the sector saw the award of only one such project to Reliance Power
at Tilaiya in Jharkhand. Since then, the government has only maid promises of inviting
bids for four other UMPPs in the states Of Oriss, tamil Nadu, Andhra Pradesh And Chhattisgarh.

In its second term, the UPA government has made this investments as the focal point. It has
decided to off load its share holding in the public sector power majors like NHPC, NTPC and REC.
The government is geared to mop up about rs.11,000 crore through the stake sale in the country's
largest power generation company.

The NTPC FPO (follow on public offer) is likely to see the light day in February 2010. Close
on the heels of NTPC, another 'navratna' PSU Rural Electrification Corp, will hit the capital
market with its follow-on public offer during the same time. REC also plans to raise fresh
10 per cent equity alongwith five per cent divestment of the Centre's holding. The disinve-
stment fever will continue to geip the sector in the next years as well with Powergrid next on
the radar.





NEYVELI TO FORAY INTO POWER, MINES INDUSTRY

Neyveli Lignite Corp. (NLC) ON Wednesday said it plans to venture into the power generation and
mining industry business.

NLC plans to participate in development of coal blocks allotted to the state government under the
public private partnership with state government undertaking, a release said.

The company has also proposed to participate in competitive bidding of power for taking up Ultra
Mega Power Project (UMPPs) floated by the power minister, it said. Stating that NLC's performance
between April-November 2009 has exceeded expectations, despite heavy rainfalls in the third quarter
of 2009-10, the company said its net sales for the first half of the year was Rs 1,765.85 crore.