POWERGRID CORPORATION OF INDIA

LIMITED
6
TH
Floor, Alankar Place,
Boring Road, Patna 01
Ph: +91-612-22129!
A Re"ort on
(ANALYSIS OF FINANCIAL STATEMENT)
#$%&itted in the "artial '$l'ill&ent re($ire&ent 'or the
A)ard the degree o'
Po*t +rad$ate ,i"lo&a in -anage&ent .200!-09/
SWETA KUMARI
(Registration No. 07PG120)
01,2R TH2 +03,A142 5F
Dr./Pro'6 Kavita Chavali Mr. Manish Kumar
Fac$lt7 +$ide 3nd$*tr7 +$ide
Alliance B-School, Manager (F & A)
Bangalore o!er "ri#, atna
2
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;

Po*t +rad$ate ,i"lo&a in -anage&ent: 200!-09
Ter& <: #t$dent* 3ntern*hi" Progra& .#3P/
,eclaration
Thi* i* to declare that the Re"ort entitled =A$A%&S'S (F F'$A$C'A% S)A)*M*$)6>
ha* %een &ade 'or the "artial '$l'ill&ent o' the 4o$r*e: #t$dent* 3ntern*hi" Progra&
.#3P/ in Ter& < .Batch: 200!-2009/ %7 &e at (+*,",'D C(,(,A)'($ (F
'$D'A %'M')*D .organi?ation/ $nder the g$idance o' Dr. @Pro'6 KA-')A
C.A-A%'.
3 con'ir& that thi* Re"ort tr$l7 re"re*ent* &7 )ork $ndertaken a* a "art o' &7 #t$dent*
3ntern*hi" Progra& .#3P/6 Thi* )ork i* not a re"lication o' )ork done "reAio$*l7 %7 an7
other "er*on6 3 al*o con'ir& that the content* o' the re"ort and the Aie)* contained
therein haAe %een di*c$**ed and deli%erated )ith the Fac$lt7 +$ide6
Signature o/ the Stu#ent 0
$ame o/ the Stu#ent (in Ca1ital %etters) 0 S+*)A K2MA,'
,egistration $o 0 34"563

#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;

Po*t +rad$ate Progra& in -anage&ent
'nternshi1 Certi/icate
Thi* i* to certi'7 that -r6 @ Ms. S+*)A K2MA,' Regn6 1o6 34"563 ha* co&"leted
the Re"ort entitled =A$A%&S'S (F F'$A$C'A% S)A)*M*$)7 $nder &7 g$idance 'or
the "artial '$l'ill&ent o' the 4o$r*e: #t$dent* 3ntern*hi" Progra& .#3P/ in Ter& < o'
the Po*t +rad$ate Progra& in -anage&ent .Batch: 200! 2009/6
(Dr. Kavita Chavali)
Signature & $ame o/ Facult8 "ui#e
B
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
TAB:2 5F 451T21T#
#ection - 16 2C240T3<2 #0--ARD
#ection - 26
.2616/
.2626/
31TR5,04T351
31,0#TRD 5<2R<328
45-PA1D 5<2R<328
#ection - 6 PR5E24T PR5F3:2
#ection - B6 5BE24T3<2 5F #T0,D
#ection - F6 5B#2R<AT351#
#ection - 66 A1A:D#3#
#ection - !6 F31,31+#
#ection - ;6 R245--21,AT351# A1, 4514:0#351
#ection - 96 :2AR131+ 50T45-2
#ection - 106 A112C0R2
F
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
2C240T3<2 #0--ARD
2C240T3<2 #0--ARD
3ndia i* the e&erging giant* o' the )orld econo&7 and international energ7 &arket*6
2nerg7 deAelo"&ent* in 3ndia are tran*'or&ing the glo%al energ7 *7*te& %7 dint o' their
*heer *i?e and their gro)ing )eight in international 'o**il-'$el trade6 3ndia i* increa*ingl7
eG"o*ed to change* in )orld energ7 &arket*6 The *taggering "ace o' 3ndian econo&ic
gro)th in the "a*t 'e) 7ear*, o$t*tri""ing that o' all other &aHor co$ntrie*, ha* "$*hed $"
*har"l7 their energ7 need*, a gro)ing *hare o' )hich ha* to %e i&"orted6 The &o&ent$&
o' econo&ic deAelo"&ent look* *et to kee" their energ7 de&and gro)ing *trongl76 A*
the7 %eco&e richer, the citi?en* 3ndia are $*ing &ore energ7 to r$n their o''ice* and
'actorie*, and %$7ing &ore electrical a""liance* and car*6 The*e deAelo"&ent* are
contri%$ting to a %ig i&"roAe&ent in their ($alit7 o' li'e, a legiti&ate a*"iration that
need* to %e acco&&odated and *$""orted %7 the re*t o' the )orld6 The con*e($ence* 'or
3ndia, the 524, and the re*t o' the )orld o' $n'ettered gro)th in glo%al energ7 de&and
are, ho)eAer, alar&ing6 3' goAern&ent* aro$nd the )orld *tick )ith c$rrent "olicie* the
$nderl7ing "re&i*e o' o$r Re'erence #cenario the )orldI* energ7 need* )o$ld %e )ell
oAer F0J higher in 200 than toda76 4hina and 3ndia together acco$nt 'or BFJ o' the
increa*e in de&and in thi* *cenario6 +lo%all7, 'o**il '$el* contin$e to do&inate the '$el
&iG6 The*e trend* lead to contin$ed gro)th in energ7-related e&i**ion* o' car%on-dioGide
.452/ and to increa*ed reliance o' con*$&ing co$ntrie* on i&"ort* o' oil and ga* &$ch
o' the& 'ro& the -iddle 2a*t and R$**ia6 Both deAelo"&ent* )o$ld heighten concern*
a%o$t cli&ate change and energ7 *ec$rit76 The challenge 'or all co$ntrie* i* to "$t in
&otion a tran*ition to a &ore *ec$re, lo)er-car%on energ7 *7*te&, )itho$t $nder&ining
6
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
econo&ic and *ocial deAelo"&ent6 1o)here )ill thi* challenge %e to$gher, or o' greater
i&"ortance to the re*t o' the )orld, than in 4hina and 3ndia6 <igoro$*, i&&ediate and
collectiAe "olic7 action %7 all goAern&ent* i* e**ential to &oAe the )orld onto a &ore
*$*taina%le energ7 "ath6 There ha* *o 'ar %een &ore talk than action in &o*t co$ntrie*6
8ere all the "olicie* that goAern&ent* aro$nd the )orld are con*idering toda7 to %e
i&"le&ented, a* )e a**$&e in an AlternatiAe Polic7 #cenario, the )orldI* energ7
de&and and related e&i**ion* )o$ld %e red$ced *$%*tantiall76 -ea*$re* to i&"roAe
energ7 e''icienc7 *tand o$t a* the chea"e*t and 'a*te*t )a7 to c$r% de&and and e&i**ion*
gro)th in the near ter&6 B$t eAen in thi* *cenario, 452 e&i**ion* are *till one-($arter B
8orld 2nerg7 5$tlook 200! a%oAe c$rrent leAel* in 2006 To achieAe a &$ch %igger
red$ction in e&i**ion* )o$ld re($ire i&&ediate "olic7 action and technological
tran*'or&ation on an $n"recedented *cale6 Both the Re'erence and AlternatiAe Polic7
#cenario "roHection* are %a*ed on )hat *o&e &ight con*ider con*erAatiAe a**$&"tion*
a%o$t econo&ic gro)th in the t)o giant*6 The7 enAi*age a "rogre**iAe and &arked *lo)-
do)n in the rate o' gro)th o' o$t"$t oAer the "roHection "eriod6 3n a High +ro)th
#cenario, )hich a**$&e* that 4hinaI* and 3ndiaI* econo&ie* gro) on aAerage 16F
"ercentage "oint* "er 7ear 'a*ter than in the Re'erence #cenario .tho$gh &ore *lo)l7
than o' late/, energ7 de&and i* 21J higher in 200 in 4hina and 3ndia co&%ined6 The
glo%al increa*e in energ7 de&and a&o$nt* to 6J, &aking it all the &ore $rgent 'or
goAern&ent* aro$nd the )orld to i&"le&ent "olicie*, *$ch a* tho*e taken into acco$nt in
the AlternatiAe Polic7 #cenario, to c$r% the gro)th in 'o**il-energ7 de&and and related
e&i**ion*6
!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
31,0#TRD A1 5<2R<328
31,0#TRD A1 5<2R<328
The 3ndian Po)er #ector: An 5AerAie)
,ecade* o' econo&ic "lanning in 3ndia 'ollo)ing inde"endence "laced *igni'icant
e&"ha*i* on the deAelo"&ent o' the "o)er *ector6 2lectricit7 generation ca"acit7 )ith
$tilitie* in 3ndia had gro)n 'ro& 1!1 -8 in ,ece&%er 19F0 to oAer 12B,2;! -8 %7
-arch 2006 .42A, 2006a/6 Ho)eAer, "er ca"ita electricit7 con*$&"tion re&ain* &$ch
lo)er than the )orld aAerage and eAen lo)er than *o&e o' the deAelo"ing A*ian
econo&ie* ()a9le 5).
T a9le 5 1er Ca1ita *lectricit8 Consum1tion (633:)
S. $o. Countr8 er Ca1ita *lectricit8 Consum1tion (;+h)
16 Argentina 21;F
26 Bra?il 1;;
6 PR4 1!9
<. 'n#ia (633<=3>) ?5:
F6 Ea"an !;1;
66 -eGico 1;01
!6 Thailand 1!F2
;6 0#A 10!;
96 8orld 2BF6
$ote0 Source0 +orl# Ban; (633?) an# C*A (633?a)
3nAe*t&ent in the *ector ha* not %een a%le to i&"roAe acce** and kee" "ace )ith the
co$ntr7I* gro)ing de&and 'or electricit7 .#ingh, 2006/6 A* on -arch 200F, the o''icial
*tati*tic* *tate that ;FJ o' 3ndiaI* F;!,000 Aillage* haAe %een electri'ied6 Ho)eAer, the
recent "o"$lation cen*$* .2001/ reAeal* that BB62J o' the ho$*ehold* do not haAe acce**
to electricit76 4on*$&er*, )ho are connected to the grid, al*o 'ace *eAere "o)er
*hortage*6 The energ7 *hortage )a* recorded to %e !6BJ .!61J/ in 200B0F .2000B/6
;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The "eak *hortage )a* e*ti&ated to %e 106FJ .1162J/ in 200B0F .2000B/6 The la*t
decade o' the "reAio$* cent$r7 )itne**ed *o&e o' the )or*t "o)er *$""l7 *it$ation* to
date6 Peaking *hortage* reached 206B9J in 1992 9 and energ7 *hortage* reached
116!J in 19969! .42A, 200Fa, 2006a/6 Po)er *hortage* are real and are h$rting the
co&"etitiAene** o' the econo&76 ,$e to the lack o' a relia%le grid *$""l7, ind$*trial $nit*
are in*talling generator*6 8hile a%o$t 21J o' 4hine*e 'ir&* and 1!J o' Bra?ilian 'ir&*
o)n electricit7 generator*, 61J o' the 3ndian 'ir&* haAe generator* in*talled to co"e )ith
"o)er *hortage*6 Real co*t o' "o)er in 3ndia i* 9J higher than that in the PR4 .8B @
3F4, 200B/6
The #iGteenth 2lectric Po)er #$rAe7 "roHect* a ca"acit7 re($ire&ent o' a%o$t 100,000
-8 'or the "eriod 200212 .42A, 2001/6 A"art 'ro& generation ca"acit7 addition and
a**ociated net)ork *trengthening, additional inAe*t&ent i* re($ired to eGtend the
tran*&i**ion and di*tri%$tion net)ork to &eet the re($ire&ent o' the $n*erAed
"o"$lation6 A ne) r$ral electri'ication *che&e, RaHiA +andhi +ra&een <id7$tikaran
DoHana, )a* introd$ced in A"ril 200F6 3t ai&* to electri'7 all Aillage* and "roAide acce**
to all ho$*ehold* )ithin 'iAe 7ear*6 The 3ndian "o)er *ector re($ire* an inAe*t&ent o'
R*69000 %illion .a""roGi&atel7 0#,200 %illion/ at 20020 "rice* to 'inance generation,
tran*&i**ion, *$%-tran*&i**ion, di*tri%$tion and r$ral electri'ication "roHect* .+53,
200Fa/6 32A .200a/ e*ti&ate* the total inAe*t&ent re($ire&ent in the 3ndian "o)er
*ector .'or the "eriod 20000/, incl$ding generation, re'$r%i*h&ent, tran*&i**ion and
di*tri%$tion, to %e 0#,66F %illion6 #$ch re($ire&ent* re'lect the 'ore*eea%le econo&ic
gro)th in the 7ear* to co&e6
The "oor 'inancial *tat$* and o"erational e''icienc7 o' #2B*@*tate $tilitie* i* i&"o*ing a
heaA7 %$rden on the econo&ic re*o$rce* o' the re*"ectiAe *tate goAern&ent*6 5n the
'inancial *ide, the lack o' eG"endit$re "r$dence and *ke)ed tari'' *tr$ct$re ha* led to a
deterioration o' the 'inancial health o' *tate $tilitie*F6 The ga" %et)een the aAerage co*t
o' *$""l7 and aAerage tari'' increa*ed 'ro& F0 "ai*a@k8h in 19969! to 110 "ai*a@k8h
9
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
in 2001026 The n$&%er o' *$%*idi?ed categorie*, a**i*ted %7 the gro)ing net)ork and
r$ral electri'ication driAe, increa*ed6 Ho)eAer, an increa*ing n$&%er o' con*$&er*,
incl$ding ind$*trial and co&&ercial con*$&er* haAe ac($ired ca"tiAe "o)er generation
ca"acitie* that "roAide %etter econo&7, ($alit7 and relia%ilit76 Poor o"erational and
technical e''icienc7, along )ith the a%oAe 'actor*, ha* re*$lted in %allooning 'inancial
lo**e* in the *ector6 The co&&ercial lo**e* o' #2B* .%e'ore *$%*id7/ d$ring 200102
)ere e*ti&ated to %e R*616!! %illion a* co&"ared to R*61160F %illion d$ring 19969!6
A'ter incl$ding the *$%*id7 "a7a%le %7 *tate goAern&ent*, the a%oAe 'ig$re* are
R*62B;6! %illion and R*6B66!B %illion, re*"ectiAel76
The aAerage con*$&er tari'' 'or *tate $tilitie* d$ring 200B0F .2000B/ i* e*ti&ated to
%e F969 "ai*a .61600 "ai*a/6 A'ter incl$ding electricit7 de"art&ent* in the 0nion
Territorie*, thi* i* e*ti&ated to %e 2!66FB "ai*a .2!B629 "ai*a/6 The ga" %et)een aAerage
co*t o' *$""l7 and aAerage tari'' declined 'ro& 11B6; "ai*a@k8h in 2000 01 to ;26;F
"ai*a@k8h in 200B0F .R2/ ;66!1 ."roAi*ional/6 The lo** on the *ale o' "o)er i*
eG"ected to re&ain oAer R*6 2!!629 %illion .lo)er than the R*6 0B62! %illion regi*tered in
200102/6
The tran*&i**ion and di*tri%$tion lo**e* re&ain a%7*&all7 high, %eing oAer B0J in *o&e
*tate*6 A *igni'icant "ro"ortion o' thi* lo** i* o' a non-technical nat$re, "ri&aril7 d$e to
the't o' electricit76 Thi* i* '$rther )or*ened %7 the "oor "a7&ent record o' c$*to&er*, a
*it$ation )hich kee"* collection e''icienc7 lo) in &an7 *tate*6 Thi* lead* to ca*h 'lo)
"ro%le&* 'or $tilitie* re*$lting in dela7ed "a7&ent* 'or "$rcha*ed "o)er, coal, and rail
tran*"ortation6 The #2B d$e* reached R*62F, !2! 4r6 in Fe%6 2001 .+53, 2001/6 The
Ahl$)alia co&&ittee reco&&endation* led to a one-ti&e *ettle&ent o' #2B d$e* thro$gh
their *ec$riti?ation a* *tate %ond* in 'aAor o' the de%tor*6 A tri"artite agree&ent )a*
*igned to en*$re that *$ch a "recario$* *it$ation )o$ld not deAelo" in the '$t$re6 3n the
10
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
ca*e o' the 'ail$re o' a *tateI* $tilitie* to "a7 d$e*, the creditor* can haAe reco$r*e to the
*tateI* "lan allocation* and it* *hare o' central taGe*6
A nat$ral-&ono"ol7-"$%lic-$tilit7 arg$&ent )a* $*ed to H$*ti'7 goAern&ent o)ner*hi" o'
the *ector, %arring *o&e eGce"tion*6 The *ector retained a legal &ono"ol7 *tat$* leading
to the deAelo"&ent o' Aerticall7 integrated *tate electricit7 %oard* .#2B*/6 Hi*toricall7,
ho)eAer, there )ere i*land* o' "riAate licen*ee* in a 'e) $r%an region*6 The lack o'
co&"etition, acco&"anied %7 "olitical in'l$ence and o"erational ine''icienc7, ha* *teered
the *ector to)ard* the a%7** o' 'inancial di*tre**6 Per*i*tent "olitical inter'erence, eAen in
the era o' Kinde"endentI reg$lation, ha* red$ced ho"e* 'or a *"eed7 recoAer76 A lack o'
"roHect &anage&ent eG"erti*e and acco$nta%ilit7 ha* led to inordinate dela7* in "lanned
inAe*t&ent* and ha* eGa*"erated &i*giAing* regarding the *ector6 The ta*k o' %ridging the
ca"acit7 *hortage* thro$gh large-*cale inAe*t&ent* cannot %e co&"letel7 entr$*ted to
"$%lic "lanning, )hich ha* o'ten *li""ed oAer it* target*6 Polic7&aker* recogni?ed thi* in
the earl7 1990* and o"ened $" the *ector 'or greater "riAate "artici"ation6 2nco$raged %7
'aAo$ra%le "olic7 deAelo"&ent* and the adAent o' inde"endent reg$lation, greater "riAate
"artici"ation i* %eco&ing Ai*i%le in the *ector, tho$gh not to the eGtent de*ira%le6
)a9le < "eneration Ca1acit8 98 Source an# (!nershi1 (in M+@ March 633?)
(!nershi1 .v#ro Steam "as Diesel $uclear ,ene!a9le )otal
#tate 2F2B; ;0F F00 60F 0 6; 6!!2F
4entral 61!2 2F9! BB19 0 60 0 992B
PriAate 906 B2B1 B!!1 F9! 0 612 1669
)otal :6:6? ?A>5B 56?B3 5636 ::?3 ?5B5 56<6A4
1ote: Additional 4a"tiAe +enerating 4a"acit7 L 19B;F -8
#o$rce: 42A .2006a/
The eGi*ting o)ner*hi" *tr$ct$re o' the generating ca"acit7 i* do&inated %7 4P#0* and
*tate $tilitie* .Ta%le B/6 5nl7 16BJ o' the generating ca"acit7 in the co$ntr7 i* o)ned %7
the "riAate *ector6 1earl7 all o' the inter-*tate tran*&i**ion ca"acit7 i* o)ned %7 the
4entral Tran*&i**ion 0tilit7 .4T0/, Po)er +rid 4or"oration o' 3ndia :td6 .P+43:/6 All
11
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
intra-*tate tran*&i**ion ca"acit7 i* o)ned %7 the re*"ectiAe *tate tran*&i**ion $tilitie*6
0nder a recent initiatiAe, a Hoint Aent$re %et)een "$%lic .P+43:/ and "riAate .a Tata
gro$" co&"an7/ inAe*tor i* con*tr$cting a tran*&i**ion line, )hich i* nearing
co&"letion6 5ther "riAate inAe*tor* *$ch a* Reliance 2nerg7 :td6 haAe recentl7 a""lied to
the 42R4 'or tran*&i**ion licen*ee*6 A"art 'ro& the "riAati?ation o' di*tri%$tion $tilitie*
in 5ri**a and ,elhi, "riAate di*tri%$tion licen*ee* haAe %een o"erating 'or decade* in the
$r%an area* like -$&%ai, 9olkata .4alc$tta/, #$rat, Ah&ada%ad and 1oida6 A n$&%er o'
"olic7 deAelo"&ent*, a* di*c$**ed in the neGt *ection, in the *ector haAe e&"ha*i?ed the
increa*ing role 'or "riAate inAe*tor* and re'or&* o' the *ector to i&"roAe it* 'inancial
"er'or&ance6
12
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
2:24TR343TD A4T 200
2:24TR343TD A4T 200
CBac;groun#M
2lectricit7 Act 200 i* *aid to %e the c$l&ination o' the "o)er
re'or&* that *tarted in earl7 1990*6 A %rie' r$n thro$gh o' the
&aHor eAent* in 3ndia that led to 2-Act )ill %e $*e'$l6
MaDor milestones in 'n#ia 1o!er re/orms
Re'or&*: -aHor &ile*tone*
Dear -ile*tone
1991 3PP Proce**
1996 5ri**a Re'or& Act
199; 4entral 2lectricit7 Reg$lator7 4o&&i**ion* Act
1999 R4* in &an7 #tate*, ,i*tri%$tion PriAati?ation in 5ri**a
200 2lectricit7 Act
3n earl7 1990*, re'or&* in the 3ndian "o)er *ector *tarted )ith the entr7 o' "riAate
"la7er* into "o)er generation6 The 4entral and #tate goAern&ent* enco$raged national
and &$ltinational co&"anie* to *et $" )hat i* called 3nde"endent Po)er Prod$cer .3PP/
"roHect*6 2nron in -ahara*htra, +<9 N #"ectr$& in AP, 2**ar in +$Harat etc are
eGa&"le*6 The initial re*"on*e )a* ($ite good, %$t $lti&atel7 onl7 'e) "lant* )ere *et
$" and &an7 haAe %een ridden %7 controAer*ie*6 1o) it i* clear that the 3PP "roce** not
onl7 re*$lted in high co*t "roHect* %$t al*o 'ailed to *olAe the "ro%le& o' generation
ca"acit7 *hortage6 ,e*"ite a decade o' "olic7 'oc$*, in FD 2002 the 3PP* contri%$ted
%arel7 J o' national generation .1F,000 -0/6 8here a*, the i&"roAed "lant
"er'or&ance d$ring thi* decade contri%$ted 6F ti&e* &ore than 3PP*6 At the *a&e ti&e,
5ri**a goAern&ent )ith actiAe *$""ort 'ro& the 8B decided to change the *tr$ct$re o'
it* "o)er *ector6 Thi* re'or& initiatiAe called the K5ri**a &odelI inAolAed $n%$ndling
and "riAati*ation o' #tate 2lectricit7 Board*6 A ne) in*tit$tion called Reg$lator7
1
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
4o&&i**ion )a* 'or&ed to decide tari'' and reg$late the *ector6 Thi* eG"eri&ent )a*
*tarted in 5ri**a )ith "a**age o' the 5ri**a Re'or&* act in 19966 -an7 other *tate*
'ollo)ed *$it6 B$t onl7 5ri**a and ,elhi act$all7 "riAati*ed the electricit7 di*tri%$tion
%$*ine** in 1999 and 2002 re*"ectiAel76
#tage* o' dereg$lation a* "er 3ndian 2lectricit7 Act 200
2lectricit7 Act 200, ha* ena%le 3ndia to lea"'rog <ario$* #tage* o' dereg$lation
'n#ia
Pre Act De* 1o De* 1o 1o
Po*t Act De* De* De* De* 1o
"lo9al *Eam1le
4hina De* 1o 1o 1o 1o
Bra?il De* De* De* 1o 1o
3tal7 De* De* De* 1o 1o
09 De* De* De* De* De*
0#A De* De* De* De* De*
Feat$re* o' 2-Act
1B
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;

2n9un#ling

(1en
access
*Fuit8
artici1ation
Form revote
Sector
Asset
Mangmnt 98
rivate
Sector

'nter-regional
Mangmnt 98
rivate Sector
The 2lectricit7 Act 200 .2-Act 200/ i* a 100 odd "age doc$&ent )ith 1;F *ection*
coAered in 1; "art*6 Till no), the 2lectricit7 #$""l7 ind$*tr7 in 3ndia )a* goAerned %7
three enact&ent*: the 3ndian 2lectricit7 Act 1910, the 2lectricit7 .#$""l7/ Act 19B; and
the 2lectricit7 Reg$lator7 4o&&i**ion* Act 199;6
The &ain 'eat$re* o' the 2-Act are:
16 +eneration delicen*ed: Ther&al generation doe* not need clearance 'ro& 42A6
5nl7 large or inter-*tate H7del "roHect* need thi*6
26 #etting $" 4a"tiAe generation doe* not need "er&i**ion6 4a"tiAe generation can
%e *et $" %7 a gro$" or *ociet7 to &eet their need*6 The ca"tiAe "lant* can %e
located o''-*ite .'ar 'ro& the con*$&"tion "oint/
6 Tran*&i**ion $tilit7 at the central leAel )ill contin$e to hold re*"on*i%ilit7 o'
coordinating "lanning o' the tran*&i**ion net)ork6 The*e $tilitie* or the #tate
goAern&ent* )o$ld look a'ter load di*"atch .*ched$ling o' "lant*, &aintenance
etc/6
B6 PriAate co&"anie* can %$ild Tran*&i**ion line* 'or ca"tiAe $*e or 'or co&&on $*e
F6 ,i*tri%$tion licen*ee* are 'ree to $ndertake generation and generation co&"anie*
are 'ree to $ndertake di*tri%$tion licen*e6 The co&&i**ion can allo) &$lti"le
licen*e* in the area o' a di*tri%$tion licen*ee6
66 For r$ral and re&ote area*, *tand alone *7*te&* 'or generation and di*tri%$tion are
allo)ed6 ,i*tri%$tion &anaged thro$gh Pancha7at*, 0*er a**ociation*, 4o-
o"eratiAe* or Franchi*e* )o$ld al*o %e "er&itted )itho$t needing licen*e .in *tate
goAern&ent noti'ied area*/6
!6 Po)er Trading i* %eing recogni?ed a* an actiAit7 that can %e taken $" a'ter
a$thori?ation o' R4*6 The R4* )o$ld i**$e licen*e and 'iG ceiling* on trading
&argin*6 ,i*tri%$tion licen*ee* and *tate goAern&ent* do not re($ire licen*e to
carr7 o$t trading6
1F
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
;6 A'ter 5"en acce** i* allo)ed, con*$&er can enter into direct co&&ercial
relation*hi" )ith a generating co&"an7 or Trader6 3n *$ch a ca*e, the "rice o'
"o)er )ill not %e reg$lated, %$t the tran*&i**ion charge* .called )heeling charge*/
and *$rcharge )o$ld %e6
96 #tate goAern&ent* can $n-%$ndle #2B* and create co&"anie*6 At the &ini&$& the
tran*&i**ion actiAit7 need* to %e *e"arated 'ro& #2B6 All *tate* *ho$ld haAe
Reg$lator7 4o&&i**ion*6
106 An A""ellate tri%$nal )ill %e created at the 4entre 'or di*"o*al o' a""eal* again*t
deci*ion* o' 42R4 and #2R4*6
16
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
3ndian "o)er *ector "ro%le&*
16 ,$ring the 'o$r and a hal' decade *ince inde"endence Po)er generating ca"acit7 in the
co$ntr7 ha* increa*ed %7 &ore than thirt7 ti&e*6 2lectricit7 generation ha* increa*ed
&ore than 'i't7 ti&e*6 A%o$t 1F &illion 'ar&er* $*e *$%*idi?ed electricit7 toda7 and
a%o$t F0 &illion 3ndian ho$*eholdI* arc electri'ied6 The n$&%er o' con*$&er* connected
to the 3ndian "o)er grid i* !F &illion )hich the "re-inde"endence 'ig$re i* 'i't7 ti&e*6
The 3ndiaO* "o)er *7*te& toda7 )ith it* eGten*iAe regional grid* i* &at$ring in to an
integrated national grid, and it* &illion* o' kilo&eter* o' T N , line* cro**ing the
co$ntr7, are tr$l7 *7&%olic o' the *$cce**e* and 'ail$re* o' the deAelo"&ental "ath
"$r*$ed *ince inde"endence6
26 Fact* and 'ig$re* a%o$t the "h7*ical gro)th o' 3ndiaO* "o)er *7*te& &a7 *o$nd hollo)
and dece"tiAe in the %ackgro$nd o' co&&on "erce"tion* a%o$t the "roAer%ial
ine''iciencie* o' the *tate electricit7 %oard*, the 'inancial lo**e* inc$rred %7 the& and the
"er"et$al "o)er cri*i* that i* %eing endle**l7 de%ated all oAer the co$ntr76 Per ca"ita
con*$&"tion o' electricit7 in 3ndia i* onl7 2;0 98H "er 7ear eAen toda7, a *&all 'raction
o' that in 0#A or other deAelo"ed co$ntrie*6 B$t it ha* increa*ed nearl7 'o$rteen 'old
*ince inde"endenceP )here a* the "er ca"ita national "rod$ct ha* onl7 do$%led6 Th$* the
national econo&7 do&inated %7 the "riAate *ector )hich acco$nt* 'or the lion *hare o'
the )ork 'orce, )a* gro)ing at a &$ch lo)er "ace )hen co&"ared to the "o)er *ector
that i* &anaged %7 the "$%lic *ector6 The co*t o' "rod$cing, di*tri%$ting and *elling
electricit7 in the co$ntr7, eAen a'ter acco$nting 'or all the direct and indirect *$%*idie* i*
three to 'o$r ti&e* lo)er co&"ared to tho*e "reAailing in the deAelo"ed co$ntrie*6 8hile
H$dging the *$cce** and 'ail$re* o' the "o)er deAelo"&ent "olicie* "$r*$ed *ince
inde"endence and *$gge*ting *ol$tion* 'or "o)er cri*i*, the*e %a*ic 'act* are o'ten
$nder"la7ed or eAen altogether oAerlooked6
1!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
6 The 2lectricit7 .*$""l7/ Act o' 19B; ha* "roAided a %road 'ra&e )ork 'or "o)er
deAelo"&ent in "o*t inde"endent 3ndia6 The 4entral 2lectricit7 A$thorit7 and the #tate
2lectricit7 Board* co&e into eGi*tence a* "er thi* act a* the c$*todian* o' "o)er $tilit7
*erAice* in the co$ntr76 ,$ring the earl7 7ear* o' 3ndian inde"endence, the 4entral 8ater
and Po)er 4o&&i**ion together )ith the Planning 4o&&i**ion had deAelo"ed the
national "er*"ectiAe* and "rogra& 'or the ra"id electri'ication o' the co$ntr76
B6 ,eAelo"&ent o' indigeno$* ca"a%ilitie* in the de*ign a* )ell a* &an$'act$ring and
con*tr$ction technologie* o' "o)er related *7*te&* and e($i"&ent )ere Aer7 &$ch an
integral "art o' the*e "er*"ectiAe*, *o that the national electri'ication "rogra& co$ld %e
not onl7 co*t e''ectiAe %$t al*o *el' *$*taining6 The co$ntr7 co$ld not a''ord contin$ed
i&"ort o' ca"ital good* and technologie* needed 'or "o)er deAelo"&ent at eGor%itant
co*t* to the eG-colonial "o)er*6 Thi* a* )ell a* the need 'or diAer*i'ication and eG"an*ion
o' the national econo&7 into the ca"ital good* *ector "ro&"ted the "$%lic *ector
initiatiAe* 'or the &an$'act$re o' "o)er "lant e($i"&ent6 3ndia )ith it* large "o"$lation
%a*e a* )ell a* lo) "er ca"ita con*$&"tion o' electrical energ7 )a* correctl7 "erceiAed
%7 the 3ndian "lanner* a* a %ig "otential &arket 'or "o)er related e($i"&ent 'or *eAeral
decade* to co&e6 3ndiaO* ca"a%ilitie* toda7 in ther&al and h7del "o)er e($i"&ent a* )ell
a* "o)er *7*te& engineering are *o&e)hat $n"aralleled a&ong the deAelo"ing co$ntrie*6
8ith regard to n$clear "o)er )ith it* total *7*te& ca"a%ilitie* incl$ding '$el "roce**ing,
3ndia ha* taken a ring *ide *cat along )ith hal' a do?en deAelo"ed co$ntrie*6 All the*e
national ca"a%ilitie* haAe hel"ed the co$ntr7 in a %ig )a7 in kee"ing do)n the
inAe*t&ent co*t* in the "o)er *ector to a large eGtent in *"ite o' the "oor linkage* )ithin
the national econo&7 d$e to inade($ate "lanning and the con*e($ent de"endence on
i&"orted in"$t* and "re**$re* generated %7 Q'oreign aid agencie*Q6 The national
enter"ri*e* in the "o)er *ector )ith their eGten*iAe eG"erience, eG"erti*e, and *killed &an
"o)er arc toda7 a &aHor a**et o' the national econo&76 Their co&"etence and
co&"etitiAene** haAe %een "roAed eAen in the international &arket6
1;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
F6 The 1TP4 that ca&e into eGi*tence d$ring the &id *eAentie* ha* &ade co&&enda%le
contri%$tion* in eG"anding ther&al "o)er ca"acitie* in the co$ntr7 "artl7 d$e to the
channeli*ing o' 'oreign credit* 'or )hich there )a* no dearth d$ring the eightie*6 3t*
co$nter"art* the 1HP4 and the 1P4 haAe al*o no) &at$red into national leAel
organi*ation* )ith i&&en*e ca"a%ilitie* and eG"erti*e in their re*"ectiAe area*6 The *tate
leAel 2lectricit7 Board* )ith total e&"lo7ee *trength o' aro$nd *eAen lakh* haAe "la7ed a
Aital role in "o)er deAelo"&ent6 B$t the7 are "$t into irrational 'inancial *($ee?e-thank*
to the $nacco$nted *$%*idie*, the7 are 'orced to eGtend a* "art o' "$%lic "olic76 :o** o'
'inancial a$tono&7 i* not onl7 ca$*ing their degeneration %$t al*o di*torting the &i**ion*
and o%HectiAe* 'or )hich the7 )ere *et $"6 The Regional 2lectricit7 Board* a* )ell a* the
42A that )ere created 'or regional and national leAel "lanning and coordination are
rendered hel"le** thank* to the lo** o' a national Ai*ion and the dil$tion o' "lanning
"roce** it*el' at the national leAel6 B$t all the*e organi?ation* together )ith their eG"erti*e
and eG"erienced &an "o)er re"re*ent an inAal$a%le a**et 'or the "o)er deAelo"&ent
"rogra& o' the co$ntr76
66 The ($e*tion o' "roAiding '$el 'or "o)er generation that )a* nearl7 do$%ling eAer7
*eAen or eight 7ear* al*o to %e nece**aril7 tackled at the national leAelP The 4oal 3ndia,
the 51+4, the +A3:, the "$%lic *ector Re'inerie*, the 0rani$& 4or"oration o' 3ndia :td
etc6 )ere the "$%lic *ector organi?ation* *et $" 'or thi* "$r"o*e6 The 3ndian Rail)a7* and
the #hi""ing 4or"oration o' 3ndia "la7 an i&"ortant role in the co*t e''ectiAe
tran*"ortation o' '$el 'or "o)er generation6 The direct and indirect inAe*t&ent* a* )ell a*
Qthe deAelo"&ental initiatiAe* 'or the "o)er *ector )a* th$* "ri&aril7 channeli?ed
thro$gh the "$%lic *ector6 #$ch a *trateg7 )a* nece**ar7 i' .he h$ge inAe*t&ent* )ere to
%e co*t- e''ectiAe at the national leAel *o that electric "o)er i* &ade aAaila%le at a "rice
a''orda%le in a %ack)ard econo&7 'or it* *$*tained gro)th and deAelo"&ent6
19
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
olic8 Develo1ments /or rivate 'nvestment in the 'n#ian o!er Sector
The econo&ic cri*i* 'aced %7 3ndia in 199091 "roAided an o""ort$nit7 'or $n*hackling
the econo&7 %7 de-licen*ing a n$&%er o' *ector*6 Thi* led to the o"ening $" o' the
in'ra*tr$ct$re *ector* incl$ding "o)er and teleco&&$nication to enhanced "riAate
"artici"ation6 #ectoral "olicie* a* )ell a* tho*e goAerning 'oreign inAe*t&ent )ere
li%erali?ed6 #ector-*"eci'ic deAelo"&ent* )ere ai&ed at i&"roAing the "olic7 cli&ate 'or
"riAate inAe*t&ent6 The "o)er *ector ha* )itne**ed Aario$* "ha*e* o' "olic7
deAelo"&ent*6 The earlie*t "ha*e, )hich %egan in the earl7 1990*, )a* ai&ed to i&"roAe
the "olic7 cli&ate 'or "riAate inAe*t&ent6 :ater on, the e&"ha*i* )a* "laced on
reg$lator7 re'or&* leading to the e*ta%li*h&ent o' inde"endent reg$lator7 co&&i**ion*6
The enact&ent o' the 2lectricit7 Act 200 led to a dee"ening $" the re'or& "roce**
thro$gh the introd$ction o' a co&"etitiAe regi&e in the 3ndian "o)er *ector6
PriAate Po)er Polic7
3n 1991, the goAern&ent o' 3ndia a&ended the 2lectricit7 #$""l7 .Act/ 19B; to allo) the
entr7 o' "riAate inAe*tor* in "o)er generation and di*tri%$tion6 A tari'' noti'ication i**$ed
in 1992, "roAided 'or a t)o-"art tari'' *tr$ct$re coAering 'iGed and Aaria%le co*t*6 3t
"roAided 'or a 16J rate o' ret$rn on e($it7 at 6;6FJ P:F 'or ther&al "lant* and .coal @
lignite@ ga*/ at 90J aAaila%ilit7 'or h7dro "o)er "lant*6
-ega Po)er Polic7
3n 199F, the goAern&ent *trengthened it* "olic7 'or "riAate inAe*t&ent in generation
"roHect* oAer 1000 -8 and )hich )o$ld *$""l7 electricit7 to &ore than one *tate,
ter&ing the& a* -ega "o)er "roHect*6 The "olic7 )a* intended to introd$ce a
co&"etitiAe %idding 'or a)arding the "roHect*6 42A, (+*,",'D and 1TP4 )ere to
"roAide catal7tic *$""ort to "riAate inAe*tor* %7 identi'7ing "otential *ite*, arranging the
20
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
tran*&i**ion o' "o)er and 'or "re"aring 'ea*i%ilit7 re"ort re*"ectiAel76 The "olic7 did not
"ro"o*e an7 'i*cal conce**ion*6 #o&e o' the*e *hortco&ing* )ere addre**ee in the
reAi*ed "olic7 o' 199; .ReAi*ed -ega Po)er Polic7/6
1ineteen "roHect*, 1B in the "$%lic *ector and F in the "riAate *ector, )ere declared to %e
&ega "o)er "roHect*6 To alleAiate ri*k* to "riAate inAe*tor* on acco$nt o' "a7&ent
*ec$rit7, the Po)er Trading 4or"oration .PT4/ )a* *et$" to "$rcha*e "o)er 'ro& the
identi'ied "roHect* and to *ell it to identi'ied #2B*6 Thi* incl$ded the ado"tion o' a ne)
"ackage o' *ec$rit7 &echani*& con*i*ting o' :etter o' 4redit and reco$r*e to *tate
goAern&entI* *hare o' 4entral Plan Allocation*6 2*ta%li*h&ent o' Reg$lator7
4o&&i**ion* and "riAati?ation o' di*tri%$tion in citie* )ith a "o"$lation eGceeding one
&illion )ere incl$ded a* "re-condition* in the "olic76 3&"ort o' ca"ital e($i"&ent 'or
*$ch "roHect* )a* eGe&"ted 'ro& c$*to&* d$t76 The "roHect* )ere al*o granted inco&e
taG holida7 'or 10 7ear* and, )hich co$ld %e clai&ed in an7 %lock o' 10 7ear* )ithin the
'ir*t 1F 7ear*6 The*e "roHect* )ere no) a%le to *ec$re d$t7 'ree i&"ort o' ca"ital good*6
Polic7 Re'or&* 'or 3nAe*t&ent in Tran*&i**ion
3n addition to generation, the *ector al*o re($ire* *$%*tantial inAe*t&ent in the
tran*&i**ion net)ork6 3n order to &eet the "roHected re($ire&ent 'or additional "o)er
generation ca"acit7 o' 100,000 -8 %7 2012, the -ini*tr7 o' Po)er e*ti&ate* that the
inAe*t&ent re($ire&ent 'or the inter-*tate tran*&i**ion net)ork )ill %e R*6 !10 %illion6 A
*igni'icant "ro"ortion o' thi* .R*6F00 %illion/ i* eG"ected to %e $ndertaken %7 the o!er
"ri# Cor1oration o/ 'n#ia %t#. ((+*,",'D), the 4entral 1B Tran*&i**ion 0tilit7
.4T0/6 The re&ainder .R*6210 %illion/ i* eG"ected to co&e 'ro& %7 "riAate inAe*tor*6 A*
a &ean* to enco$rage "riAate inAe*t&ent in tran*&i**ion net)ork*, the 2lectricit7 :a)*
.A&end&ent/ Act 199; )a* enacted6 Thi* 'acilitated the in'$*ion o' "riAate *ector
inAe*t&ent in tran*&i**ion thro$gh grant o' tran*&i**ion licen*e*6 +$ideline* 'or "riAate
*ector "artici"ation in the tran*&i**ion *ector )ere introd$ced in Ean$ar7 20006 The*e
g$ideline* enAi*age t)o ro$te* 'or "riAate *ector "artici"ation: Eoint <ent$re .E</ ro$te,
21
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
)herein the 4T0@#T0 o)n* at lea*t 26J e($it7 and the %alance i* contri%$ted %7 the
Eoint <ent$re Partner .E<P/ and the 3nde"endent PriAate Tran*&i**ion 4o&"an7 .3PT4/
Ro$te, )herein 100J o' the e($it7 i* o)ned %7 the "riAate entit76 A Hoint Aent$re 'or the
con*tr$ction o' a 1200-k& tran*&i**ion line to tran*&it "o)er 'ro& Bh$tan to the
1orthern grid ha* %een *$cce**'$ll7 la$nched %7 "C'% )ith the Tata +ro$"6
Reg$lator7 Re'or&*
An a""ro"riate "olic7 'ra&e)ork 'or "riAate "artici"ation in the "o)er *ector i* a
nece**ar7 %$t not a *$''icient condition 'or to i&"roAe the cli&ate 'or "riAate inAe*t&ent
in the *ector6 -aHor h$rdle* 'aced %7 the "riAate inAe*tor* incl$de 'r$*tration* in
receiAing ad&ini*tratiAe a""roAal*, "a7&ent ri*k* )ith 'inanciall7 )eak
#2B*@di*tri%$tion $tilitie*, lack o' *oAereign g$arantee*, "olitical *ta%ilit7 and the
"artiall7 li%erali?ed '$el &arket*, e*"eciall7 'or the coal *ector6
The goAern&ent reali?ed that in order to attract &$ch-needed "riAate inAe*t&ent into the
"o)er *ector, the *e"aration o' the di*tri%$tion *eg&ent o' the "o)er *ector *ho$ld %e
carried o$t to i&"roAe it* "er'or&ance6 :ed %7 *i&ilar deAelo"&ent* in a n$&%er o'
co$ntrie* aro$nd the )orld a "roce** o' re'or& )a* introd$ced in the *tate o' 5ri**a6 3t
%eca&e the 'ir*t *tate to $n%$ndle the electricit7 %oard into 'iAe cor"orati?ed entitie*R
one each 'or generation and tran*&i**ion, and one each 'or the three di*tri%$tion ?one* in
the *tate6 An inde"endent reg$lator7 co&&i**ion .5ri**a 2lectricit7 Reg$lator7
4o&&i**ion/ )a* al*o *et $" to oAer*ee the '$nctioning o' the tran*&i**ion and
di*tri%$tion co&"anie*6 5ri**a later "riAati?ed it* "o)er co&"anie*6 #$%*e($entl7,
Har7ana and Andhra Prade*h al*o 'ollo)ed the t)in *trateg7 o' $n%$ndling and
reg$lator7 re'or&6 3n 199;, the 4entral 2lectricit7 Reg$lator7 4o&&i**ion .42R4/ )a*
*et $" $nder the 2lectricit7 Reg$lator7 4o&&i**ion* Act, 199;6 The &ain '$nction* o'
the co&&i**ion incl$de reg$lating the tari''* o' generating co&"anie* o)ned or
controlled %7 the 4entral +oAern&ent or tho*e *erAing &ore than one *tate, a* )ell a*
inter-*tate tran*&i**ion and tari''* o' tran*&i**ion $tilitie*6
22
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
At the *tate leAel, the #tate 2lectricit7 Reg$lator7 4o&&i**ion* .#2R4*/ introd$ced a
tran*"arent "roced$re 'or tari'' 'iling, it* reAie), and the ado"tion o' an order $nder
)hich the $tilitie* )o$ld 'iG tran*&i**ion and di*tri%$tion tari''* 'or Aario$* con*$&er
categorie*6 The "roce** o' tari'' deter&ination ha* %eco&e &ore tran*"arent and
"artici"ator7 d$e to "$%lic anno$nce&ent o' tari'' 'iling* %7 the $tilitie*6 T)ent7-'o$r
*tate* haAe *et $" reg$lator7 co&&i**ion*, and 1; o' the*e reg$lator7 co&&i**ion* .the
#2R4*/ haAe i**$ed tari'' order*6 The *&aller *tate* in the 1orth 2a*t haAe e*ta%li*hed a
Eoint 2lectricit7 Reg$lator7 4o&&i**ion6 Thirteen *tate* haAe $n%$ndled and
cor"orati?ed their "reAio$*l7 integrated #2B*6 The inde"endence o' reg$lator7
in*tit$tion* re&ain* $nder&ined %7 indirect control oAer the a""oint&ent o' the &e&%er*
o' the reg$lator7 in*tit$tion* and %7 dela7ing 'inancial inde"endence to *$ch in*tit$tion*6
The reg$lator7 enAiron&ent ha* neAerthele** red$ced $ncertaintie* a**ociated )ith ad
hoc %ehaAior %7 the electricit7 $tilitie* $nder "olitical in'l$ence6 The concern* regarding
reg$lator7 $ncertaint7 and lack o' incentiAe* in the rate o' ret$rn reg$lation haAe %een
addre**ed thro$gh ado"tion o' a &$lti-7ear tari'' .-DT/ 'ra&e)ork %7 the 42R46 The
2lectricit7 Act o' 200 "re*cri%ed ado"tion o' -DT "rinci"le* %7 all reg$lator7
in*tit$tion*6 #o&e o' the #2R4* haAe initiated a con*$ltation "roce** 'or introd$cing the
*a&e6 Ho)eAer, it* e''ectiAe i&"le&entation )o$ld %e in'l$enced %7 aAaila%ilit7 o'
relia%le hi*torical data )hich i* cr$cial to de*igning a""ro"riate incentiAe*6
,i*tri%$tion Re'or&* and PriAati?ation
-o*t o' the ill* o' the 3ndian "o)er *ector 'ind their origin in the di*tri%$tion *eg&ent6
The di*tri%$tion *eg&ent ha* lagged %oth in ter&* o' o"erational e''icienc7 a* )ell a*
'inancial "er'or&ance6 The *lo) "ace o' inAe*t&ent generation a* )ell a* di*tri%$tion
*eg&ent can %e attri%$ted to the *eAere ca*h 'lo) "ro%le& a**ociated )ith the $nder-
recoAer7 o' co*t* and "oor collection e''icienc76 Poor o"erational e''icienc7 '$rther
aggraAate* the *it$ation6 The 9ohli 4o&&ittee on 'inancing o' "o)er *ector e&"ha*i*ed
the need 'or i&"roAing the 'inancial Aia%ilit7 o' *tate $tilitie* and 'or re'or&ing the "o)er
2
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
*ector in *tate*6 8itho$t the*e cr$cial *te"*, it )a* 'elt that the de*ired inAe*t&ent* in the
"o)er *ector &a7 not %e 'orthco&ing .+53, 2002a/6
Recogni?ing the need to accelerate re'or&* in the di*tri%$tion *ector the central
goAern&ent introd$ced the Accelerated Po)er ,eAelo"&ent Progra& .AP,P/ in 2000
01 to re*tore the co&&ercial Aia%ilit7 o' the di*tri%$tion *eg&ent6 To enco$rage re'or&*
in the di*tri%$tion *ector, it )a* rechri*tened the Accelerated Po)er ,eAelo"&ent and
Re'or&* Progra& .AP,RP/ d$ring 200206 Additional e&"ha*i* )a* "laced on
&ile*tone* 'or re'or&ing the ailing di*tri%$tion *eg&ent in the *tate*6 The &ain o%HectiAe*
o' the "rogra& incl$de i&"roAing the 'inancial Aia%ilit7 o' *tate $tilitie*, red$cing o'
aggregate technical and co&&ercial .AT N 4/ lo**e*, i&"roAing c$*to&er *ati*'action,
and increa*ing the relia%ilit7 and ($alit7 o' the "o)er *$""l76 The *che&e al*o
enco$rage* the e*ta%li*h&ent o' #2R4*, &etering o' 11 k< 'eeder* and o' all con*$&er*,
and energ7 a$dit* at the 11 k< leAel6 A n$&%er o' *tate $tilitie* gained 'ro& the AP,RP
*che&e %7 red$cing ca*h lo**e* and *ec$ring e($iAalent grant* 'ro& the central
goAern&ent6
The "riAati?ation "lan 'or di*tri%$tion ?one* in ,elhi *"eci'ied a 'iAe-7ear tari'' "ro'ile,
agreea%le to the reg$lator .,elhi 2lectricit7 Reg$lator7 4o&&i**ion/6 Thi* hel"ed in
&itigation o' reg$lator7 ri*k %7 en*$ring tari'' certaint7 and "er'or&ance &ile*tone* 'or a
'iAe-7ear )indo)6 2Aen *o, the "riAati?ation *che&e )a* &ade "o**i%le %7 a *$%*tantial
*$%*id7 o' 0#,!20 &illion %$dgeted %7 the *tate goAern&ent oAer the 'iAe 7ear "eriod6
Thi* )o$ld not %e ea*7 to re"licate in other *tate*6 The Planning 4o&&i**ion e*ti&ated
that i' the "riAati?ation o' di*tri%$tion in other *tate* i* carried o$t in line )ith the ,elhi
&odel, it )o$ld tran*late into a Aia%ilit7 ga" 'inancing o' R*6 1000 %illion .+53, 200F%/6
3n the "riAati?ed di*tri%$tion ?one o' 5ri**a and ,elhi, TN, lo**e* re&ain a%oAe BFJ
and B0J re*"ectiAel76 +iAen the not-*o-*$cce**'$l eG"erience to date, the Planning
4o&&i**ion ha* *$gge*ted alternatiAe* *$ch a* la*t &ile "riAati?ation inAolAing &etering,
&eter reading, %illing and collection .+53, 200F%/6
2B
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
APPR5A4H T5 11TH P:A1 - 4o&&ent* on Po)er #ector
The Ai*ion o' 0PA goAern&ent on 11th "lan can %e contained in a n$t *hell a* 'ollo)*6
=The 11th Plan "roAide* an o""ort$nit7 to re*tr$ct$re "olicie* to achieAe a ne) Ai*ion o'
gro)th that )ill %e &$ch %roader %a*ed and incl$*iAe, %ringing a%o$t a 'a*ter red$ction
in "oAert7 and hel"ing %ridge the diAide* that are c$rrentl7 the 'oc$* o' *o &$ch
attention6 The 'ir*t *te"* in thi* direction )ere initiated in the &iddle o' the Tenth Plan
%a*ed on the 1ational 4o&&on -ini&$& Progra& ado"ted %7 the +oAern&ent6 The*e
*te"* &$*t %e '$rther *trengthened and con*olidated into a *trateg7 'or the 11th Plan6>
The *$gge*tion* to '$l'ill thi* Ai*ion are %rie'ed in the a""roach "a"er a* giAen %elo)6

>8ork done in the Planning 4o&&i**ion and el*e)here *$gge*t* that the econo&7 can
gro) %et)een ;J and 9J "er 7ear on a *$*tained %a*i* "roAided a""ro"riate "olicie* are
"$t in "lace6 8ith "o"$lation gro)ing at 16FJ "er 7ear, thi* )o$ld en*$re that the real
inco&e o' the aAerage 3ndian )o$ld do$%le in ten 7ear*6 3t i* al*o "o**i%le to ado"t
"olicie* that )ill en*$re that thi* gro)th i* %road %a*ed, %ene'iting all "art* o' the
co$ntr7, and e*"eciall7 the r$ral area*6 Thi* &$*t %e acco&"anied %7 a &aHor e''ort to
"roAide acce** to %a*ic 'acilitie* *$ch a* health, ed$cation, clean drinking )ater etc6, to
large "art* o' o$r "o"$lation )hich do not haAe *$ch acce** at "re*ent =
2F
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
(verall er/ormance o/ 'n#ian o!er Sector #uring 6334-3A
2lectricit7 generation %7 "o)er $tilitie* d$ring 200!-0; )a* targeted to go $" %7 !62 "er
cent to !10 %illion 98h6 The gro)th o' "o)er generation in A"ril-,ece&%er 200! )a*
lo)er than the targeted gro)th rate6 8hile gro)th in all three *eg&ent*, that i*, ther&al,
h7dro and n$clear generation, *lo)ed do)n, n$clear "o)er generation, in "artic$lar,
*ho)ed the *har"e*t decline d$ring the c$rrent 7ear in co&"ari*on to the corre*"onding
"eriod la*t 7ear6
+ro)th in +,P and Po)er generation
26
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Po)er +eneration %7 0tilitie* .Billion 98H/
The de'icit in "o)er *$""l7 in ter&* o' "eak aAaila%ilit7 and o' total energ7 aAaila%ilit7
d$ring the c$rrent 7ear )a* 1B6; "er cent and ;6B "er cent, re*"ectiAel76 8hile *hortage*
are %eing eG"erienced %7 each region, the7 are &ore ac$te in the 1orth-2a*tern and the
8e*tern Region6
Po)er #$""l7 Po*ition- All- 3ndia
2!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
3n the ca*e o' the ther&al "o)er *ector, the #tate, 4entral and "riAate *ector "lant*
re"orted a "lant load 'actor .P:F/, a &ea*$re o' e''icienc7, o' !062, ;F6B and 926F
"ercent re*"ectiAel7, d$ring A"ril-,ece&%er 200!-0;6 6 The P:F in each o' the*e *ector*
a* )ell a* in eAer7 region ha* i&"roAed oAer ti&e6 Ho)eAer, there i* a &arked Aariation
acro** the region*6
Ther&al Plant* :oad Factor .'ig$re in "ercent/
Coal an# gas in1ut /or the 1o!er sector
The "o)er *ector i* a &aHor con*$&er o' coal $*ing a%o$t !; "er cent o' the co$ntr7I*
coal "rod$ction6 4oal-'ired ther&al $nit* acco$nt 'or aro$nd 6262 "er cent o' total "o)er
generation in the co$ntr76 Th$*, coal contin$e* to %e the &ain*ta7 'or the "o)er *ector6
The total con*$&"tion o' coal %7 the "o)er *ector in 2006-0! )a* 026F &illion tonne
.-T/6 5' thi*, a%o$t 96! -T )a* i&"orted in 2006-0!6 A%o$t !6 -T o' coal ha* %een
i&"orted in 200!- 0; .$" to ,ece&%er 1, 200!/6
2;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
4oal con*$&"tion and i&"ort* %7 Po)er #tation* .-T/
5$t o' the total in*talled generating ca"acit7 in the co$ntr7, a%o$t 106F "er cent .i6e6,
1B,6916! -8/, i* %a*ed on ga* or li($id '$el .eGcl$ding die*el/6 The *$""l7 o' ga* to
"o)er *tation* that $*e ga* a* the "ri&ar7 '$el re&ain* inade($ate6 4o&&it&ent* o' ga*
allocation* &ade to "o)er *tation* in the "a*t are not %eing '$l'illed, there%7 leading to
lo** in generation6
Trend* in ga* aAaila%ilit7 in the "o)er *ector

29
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
*leventh Five &ear lan Ca1acit8 A##ition an# olic8 Frame!or;
2lectricit7 i* in the conc$rrent li*t in the 4on*tit$tion6 The 1ational 2lectricit7 Polic7
.12P/, 200F recogni?e* electricit7 a* a =%a*ic h$&an need> and target* a ri*e in "er
ca"ita aAaila%ilit7 'ro& 61 $nit* to 1,000 $nit* "er ann$& %7 the end o' 20126 To '$l'ill
the o%HectiAe* o' the 12P, a ca"acit7 addition o' !;,F!! -8 ha* %een "ro"o*ed 'or the
2leAenth FiAe Dear Plan6 The "o)er *ector i* eG"ected to gro) at 96F "er cent "er ann$&6
2leAenth "lan "o)er ca"acit7 addition target .-8 and "ercent/
A n$&%er o' "roHect* enAi*aged 'or the 2leAenth FiAe Dear Plan haAe &ade *tead7
"rogre**, )ith &o*t o' the*e in a "o*ition to %e co&&i**ioned )ell )ithin the Plan
"eriod6 The *tat$* o' "lace&ent o' order* 'or the &ain "lant .ther&al "roHect*/ and &ain
ciAil )ork* .'or h7dro "roHect*/ i* giAen %elo)6
#tat$* o' 2leAenth 'iAe 7ear "lan ca"acit7 addition .-8/ A* on Ean6 1, 200;
0
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Ca1acit8 a##ition #uring 6334-3A
Ba*ed on the *tat$* o' Aario$* "roHect*, the target 'or 200!-0; )a* 'iGed at 12,09 -8,
o' )hich !,26 -8 ha* %een co&&i**ioned $" to Ean$ar7 1, 200!6 3t i* eG"ected that
the total ca"acit7 addition d$ring the c$rrent 'inancial 7ear )o$ld %e 10;216; -8 )ith
ther&al, h7dro and n$clear acco$nting 'or ;01F -8, 2F;! -8 and 220 -8
re*"ectiAel76
Po)er "lant* $*ing *$"er-critical technolog7 haAe a higher ther&al e''icienc7 o' a%o$t B0
"er cent a* co&"ared to ;66 "er cent 'or *$%-critical $nit* o' F00 -8 $nit* or le**6 At
"re*ent, all the o"erating ther&al "o)er $nit* are *$%-critical $nit*6 #iG *$"er-critical
$nit* o' 660 -8 o' 1TP4 :td, at #i"at . G 660/ and Barh . G 660/ are at an adAanced
*tage o' con*tr$ction, and the 'ir*t *$"er-critical $nit i* eG"ected to %e co&&i**ioned
d$ring 200;-096
2ltra Mega o!er roDects
The +oAern&ent o' 3ndia la$nched an initiatiAe 'or deAelo"&ent o' coal-%a*ed 0ltra
-ega Po)er ProHect* .0-PP*/, each )ith a ca"acit7 o' B,000 -8 or a%oAe6 The
"roHect* )ill %e a)arded to deAelo"er* on the %a*i* o' tari''-%a*ed co&"etitiAe %idding6
To 'acilitate tie-$" o' in"$t* and clearance*, "roHect-*"eci'ic *hell co&"anie* haAe %een
*et $" a* )holl7-o)ned *$%*idiarie* o' the Po)er Finance 4or"oration .PF4/ :td6 The*e
co&"anie* )o$ld $ndertake "reli&inar7 *t$die* and o%tain clearance* relating to )ater,
land, '$el, and "o)er o''take tie-$" "rior to a)ard o' the "roHect6
5riginall7, nine *ite* )ere identi'ied %7 42A in nine #tate* 'or the "ro"o*ed 0-PP*6
The*e incl$de 'o$r "ithead *ite*, one each in 4hhatti*garh, Eharkhand, -adh7a Prade*h
and 5ri**a, and 'iAe coa*tal *ite*, one each in Andhra Prade*h, +$Harat, 9arnataka,
-ahara*htra and Ta&il 1ad$6 3t i* "ro"o*ed to *et $" "ithead "roHect* a* integrated
"roHect* )ith ca"tiAe coal &ine*6 The -ini*tr7 o' 4oal ha* allocated ca"tiAe coal &ining
%lock.*/ 'or #a*an 0-PP in -adh7a Prade*h, 'or 5ri**a 0-PP .eGce"t 'or 4hat$rdhara
1
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
%lock/, 'or Tilai7a 0-PP in Eharkhand and 'or 4hhatti*garh 0-PP6 For the coa*tal
"roHect* $*age o' i&"orted coal i* enAi*aged6 The 0-PP "roHect* )o$ld hel" lo)er the
co*t o' "o)er to con*$&er* and red$ce e&i**ion*6
To 'acilitate 'a*ter "roHect deAelo"&ent, a "ro"o*al ha* %een &ade 'or *etting $" 'iAe
$ltra &ega "o)er "roHect* o' 2000 -8 each6 #o 'ar, re($e*t* 'or ($ali'ication .RFS/
haAe %een inAited 'or t)o *$ch "roHect*6 The Po)er Finance 4or"oration, a do&e*tic
'inancial in*tit$tion catering to the "o)er *ector, i* entr$*ted )ith the re*"on*i%ilit7 o'
initial "roHect deAelo"&ent6 The*e "roHect* are to %e o''ered to inAe*tor* on an
internationall7 co&"etitiAe %a*i*6
)o1 Five ,ate# State 2tilities (633: to 633?)
,an; 633: 633< 633> 633?
5 Andhra Prade*h ,elhi Andhra Prade*h Andhra Prade*h
6 9arnataka Andhra Prade*h +$Harat +$Harat
: Har7ana +oa ,elhi ,elhi
< RaHa*than 9arnataka 9arnataka 9arnataka
> -ahara*htra +$Harat Ta&il 1ad$ 8e*t Bengal
? ,elhi Har7ana +oa +oa
4 +$Harat P$nHa% Hi&achal Prade*h Hi&achal Prade*h
A Hi&achal Prade*h Hi&achal Prade*h 8e*t Bengal Hi&achal Prade*h
B Ta&il 1ad$ 0P 0P -ahara*htra
53 P$nHa% RaHa*than 4hatti*garh 9erala
#o$rce: 4R3#3:@34RA .2006, 200F, 200B, 200/
2
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Plan 'or deAelo"&ent o' h7dro "otential
3ndia i* endo)ed )ith an e*ti&ated h7dro "o)er "otential o' &ore than 1,F0,000 -86
Ho)eAer, onl7 2161B "er cent o' the "otential ha* %een deAelo"ed till date and 96F "er
cent i* %eing deAelo"ed6 The &ain rea*on* 'or the *lo) deAelo"&ent incl$de di''ic$lt and
inacce**i%le "otential *ite*, di''ic$ltie* in land ac($i*ition, reha%ilitation, enAiron&ental
and 'ore*t-related i**$e*, inter#tate i**$e*, geological *$r"ri*e* and long ge*tation
"eriod6 PriAate *ector "artici"ation i* there'ore negligi%le %$t ha* %een increa*ing in the
recent "a*t6 There are 10 #che&e* )ith an in*talled ca"acit7 o' 991 -8 $nder
con*tr$ction )hile 6! #che&e* )ith an in*talled ca"acit7 o' 1;,00 -8 haAe %een
allotted to "riAate deAelo"er* %7 #tate*6
There are BF h7dro "roHect* )ith an aggregate ca"acit7 o' 1F,000 -8 $nder
con*tr$ction6 Pre"aration o' "re-'ea*i%ilit7 re"ort* o' 162 *che&e* )ith aggregate
in*talled ca"acit7 o' B9,90 -8 ha* %een co&"leted %7 42A6 B$lk o' the "otential
)hich i* in the Hi&ala7an region R the hill #tate* o' Ea&&$ N 9a*h&ir, Hi&achal
Prade*h, 0ttarakhand and the 1orth-2a*t R i* 7et to %e ta""ed6
1e) h7dro "olic7
The 2lectricit7 Tari'' Polic7, )hich )a* noti'ied in Ean$ar7 2006, allo)* a *"ecial
di*"en*ation 'or "roHect deAelo"&ent %7 the #tate and 4entral P#0* on the %a*i* o'
ca"ital co*t and nor& %a*ed tari'' to %e deter&ined %7 the Reg$lator7 4o&&i**ion6
The di*"en*ation, allo)ed 'or P#0*, )o$ld no) %e aAaila%le to the "riAate *ector 'or the
*a&e "eriod o' 'iAe 7ear* .'ro& Ean$ar7 2006/6 Thi* i* contingent on a tran*"arent
"roced$re %eing 'ollo)ed %7 the ho*t #tate in allotting "roHect* and on ti&el7
achieAe&ent o' *"eci'ied &ile*tone*6 The "roHect deAelo"er )o$ld haAe to *et a"art 1 "er
cent o' the "o)er generated to)ard* the deAelo"&ent o' the a''ected local area and
"roAide 100 $nit* o' 'ree "o)er "er a''ected 'a&il7 "er &onth 'or a "eriod o' 10 7ear*6 A

#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;

*i&ilar 1 "er cent &atching contri%$tion i* eG"ected 'ro& the ho*t #tate 'or local area
deAelo"&ent6 The*e "roAi*ion* are eG"ected to "roAide a reg$lar *trea& o' reAen$e 'or
the )el'are o' the "roHect a''ected "eo"le6
8hile the initiatiAe 'or allocation o' the "roHect* )o$ld re&ain )ith the #tate
+oAern&ent, the *cr$tin7 %7 the reg$lator and the 42A )o$ld en*$re that the "roHect i*
de*igned and %$ilt in an o"ti&al and econo&ic &anner, and that the intere*t o' the
con*$&er* i* "rotected6 The ProHect A''ected Fa&ilie* .PAF*/ are eG"ected to get a %etter
relie' and reha%ilitation .RNR/ "ackage6 Fro& the "oint o' Aie) o' the deAelo"er, the
"roced$re enAi*aged )o$ld red$ce the ri*k* a**ociated )ith the con*tr$ction, o"eration
and &aintenance .5N-/ o' h7dro "roHect* and 'acilitate earl7 'inancial clo*$re6
Merchant o!er lants
The -ini*tr7 o' Po)er ha* i**$ed g$ideline* 'or the *etting $" o' -erchant Po)er Plant*
.-PP*/ 'or )hich '$el tie-$" )o$ld %e 'acilitated6 0nlike traditional $tilitie*, -erchant
Po)er Plant* co&"ete 'or c$*to&er* and a%*or% '$ll &arket ri*k6 The7 are a &arket-%a*ed
re*"on*e to the gro)ing electricit7 de&and6 There are no g$arantee* o' &ini&$& o''
take6
$ational gri#
The eGi*ting inter-regional tran*&i**ion ca"acit7 o' a%o$t 1!,000 -8 that connect* the
1orthern, 8e*tern, 2a*tern and 1orth-2a*tern Region* in a *7nchrono$* &ode .at the
*a&e 're($enc7/ and the #o$thern Region a*7nchrono$*l7 ha* ena%led inter-regional
energ7 eGchange o' a%o$t ; %illion k8h .Ean$ar7- 1oAe&%er 200!/6 3t i* eG"ected that
the interregional ca"acit7 o' &ore than !,!00 -8 )o$ld %e achieAed %7 the end o' the
2leAenth FiAe Dear Plan6 Pro"o*al* are $nder )a7 to haAe *7nchrono$* integration o'
#o$thern Region )ith the re*t o' the region* 'or&ing an all-3ndia *7nchrono$* grid6
The -ini*tr7 o' Po)er ha* noti'ied Tari''- Ba*ed 4o&"etitiAe Bidding +$ideline* 'or
Tran*&i**ion #erAice $nder #ection 6 o' the 2lectricit7 Act, 200, to enco$rage
B
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
co&"etition in deAelo"&ent o' tran*&i**ion "roHect*6 A* "er the*e g$ideline*, an
e&"o)ered co&&ittee $nder the 4hair&an*hi" o' -e&%er, 4entral 2lectricit7
Reg$lator7 4o&&i**ion ha* %een con*tit$ted6 Thi* co&&ittee ha* identi'ied 1B
tran*&i**ion "roHect* to %e deAelo"ed %7 the "riAate *ector thro$gh tari'' %a*ed
co&"etitiAe %idding6 The R$ral 2lectri'ication 4or"oration .R24/ and Po)er Finance
4or"oration .PF4/ haAe %een entr$*ted )ith the ta*k o' 'or&$lating Fea*i%ilit7
Re"ort*@,etailed ProHect Re"ort* .,PR*/ 'or the*e "roHect* and to inAite %id*6
)ra#ing o/ electricit8
0nder the 2lectricit7 Act o' 200, =trading> ha* %een recogni?ed a* a di*tinct licen*ed
actiAit7 in addition to di*tri%$tion and tran*&i**ion6 Trading hel"* in re*o$rce
o"ti&i?ation %7 'acilitating the di*"o*al o' *$r"l$* "o)er )ith di*tri%$tion $tilitie* on the
one hand, and in &eeting *hort-ter& "eak de&and on the other6 The 4entral and #tate
2lectricit7 Reg$lator7 4o&&i**ion* haAe "o)er* to grant inter-*tate and intra-*tate
trading licence*, re*"ectiAel76 42R4 ha* granted 26 inter-*tate trading licence* *o 'ar6
Trader* are categori?ed on the %a*i* o' Aol$&e o' electricit7 to %e traded and net )orth o'
the trader6
3nter-*tate trading in electricit7
o!er eEchanges
42R4 ha* i**$ed g$ideline* 'or *etting $" "o)er eGchange*6 3t ha* al*o giAen a""roAal to
one a""lication 'or *etting $" "o)er eGchange6 Thi* )o$ld '$rther 'acilitate co&"etition
in the electricit7 *ector6
F
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
"ui#elines /or 1rocurement o/ electricit8
3n co&"liance )ith #ection 6 o' the 2lectricit7 Act, 200, the 4entral +oAern&ent on
Ean$ar7 19, 200F, noti'ied g$ideline* 'or "roc$re&ent o' "o)er %7 di*tri%$tion licen*ee*
thro$gh co&"etitiAe %idding6 The 4entral +oAern&ent ha* al*o i**$ed the *tandard %id
doc$&ent containing Re($e*t For S$ali'ication .RFS/, Re($e*t For Pro"o*al .RFP/ and
&odel Po)er P$rcha*e Agree&ent .PPA/ 'or long-ter& "roc$re&ent o' "o)er 'ro&
"roHect* haAing *"eci'ied *ite and location thro$gh tari''-%a*ed co&"etitiAe %idding6 The
4entral +oAern&ent ha* reAi*ed the*e *tandard %idding doc$&ent* on #e"te&%er 21,
200!6 Thi* i* likel7 to %ring in larger "riAate *ector inAe*t&ent in the "o)er *ector and
co&"etitiAe tari''*6
,ural electri/ication
The 4entral +oAern&ent la$nched a *che&e =RaHiA +andhi +ra&een <id7$tikaran
DoHana> .R++<D/ in A"ril 200F )ith the goal o' electri'7ing all $nelectri'ied Aillage*
and ha&let* and "roAiding acce** to electricit7 to all ho$*ehold* in the neGt 'iAe 7ear* 'or
'$l'ill&ent o' the 14-P6 The *che&e "roAide* 'or 'ree electricit7 connection* to %elo)
"oAert7 line .BP:/ ho$*ehold*6 R$ral 2lectri'ication 4or"oration i* the nodal agenc7 and
the &anage&ent o' r$ral di*tri%$tion ha* %een enAi*aged thro$gh 'ranchi*ee* )ho co$ld
%e nongoAern&ental organi?ation* .1+5*/, $*er*I a**ociation*, coo"eratiAe* or
indiAid$al entre"rene$r*6 Pancha7at in*tit$tion* )o$ld %e a**ociated )ith the
&anage&ent6
The +oAern&ent ha* a""roAed the contin$ation o' the R++<D d$ring the 2leAenth FiAe
Dear Plan "eriod )ith an initial o$tla7 o' R*6 2;,000 crore )ith an enAi*aged coAerage in
Pha*e-3 o' a%o$t 161F lakh $nelectri'ied Aillage* and 26B crore r$ral BP: ho$*ehold*6 A
three-tier ($alit7 control &echani*& $nder R++<D i* %eing *et $" at the #tate, R24 and
the -ini*tr7 o' Po)er leAel )ith rando& in*"ection* %7 inde"endent agencie*6
6
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
*lectricit8 (Amen#ment) Act, 6334
The 2lectricit7 .A&end&ent/ Act, 200!, enacted on -a7 29, 200!, and %ro$ght into
'orce 'ro& E$ne 1F, 200!, a&end* certain "roAi*ion* o' the 2lectricit7 Act, 2006 3t* &ain
'eat$re* are:
The 4entral +oAern&ent, Hointl7 )ith the #tate +oAern&ent* )ill endeaAo$r to
"roAide acce** to electricit7 to all area* incl$ding Aillage* and ha&let* thro$gh
r$ral electricit7 in'ra*tr$ct$re and electri'ication o' ho$*ehold*P
1o licence i* re($ired 'or *ale 'ro& ca"tiAe $nit*6
,eletion o' the "roAi*ion 'or eli&ination o' cro**e* *$%*idie*6 The "roAi*ion 'or
red$ction o' cro** *$%*idie* )o$ld contin$e6
Financial er/ormance o/ o!er 2tilities
3&"roAing 'inancial Aia%ilit7 o' "o)er $tilitie* i* one o' the ke7 deliAera%le* o' "o)er
*ector re'or&*6 The total co&&ercial lo**e* eGcl$ding *$%*id7 o' the #tate "o)er *ector
ha* %een e*ti&ated at R*6 2;,;2B69 crore in 2006- 0!6 The rate o' ret$rn o' the #tate
"o)er *ector )hich )a* .-/ 2B601 "er cent in 2006-0! .P/ i* e*ti&ated to haAe i&"roAed
to .-/ 1; "er cent in 200!-0; .R2/6 1eAerthele**, the gro** *$%*id7 re&ained *$%*tantiall7
higher at R*6 B,1266 crore )ith the *$%Aention e*ti&ated at R*6 1B,1F966 crore in 200!-
0;6
Financial "er'or&ance o' #tate "o)er *ector
!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
*nerg8 Conservation an# *//icienc8
8hile initiatiAe* 'or addition to ca"acit7 to &eet the gro)ing de&and 'or "o)er are
i&"ortant in their o)n right, enAiron&ental con*ideration* and the need 'or e''icient $*e
o' re*o$rce* &ake it i&"eratiAe to "a7 'oc$*ed attention to =de&and*ide &anage&ent> a*
)ell6 To thi* end, the 2nerg7 4on*erAation Act, 2001, e&"o)er* the 4entral +oAern&ent
.and in *o&e in*tance* the #tate +oAern&ent*/ to take concerted &ea*$re* to red$ce the
energ7 inten*it7 o' the 3ndian econo&76 The Act ena%le* the "ro&otion o' energ7
con*erAation &ea*$re* thro$gh innoAatiAe 'inancing and deliAer76 3t al*o "roAide* 'or
noti'7ing energ7 inten*iAe ind$*trie*, e*ta%li*h&ent* and co&&ercial %$ilding* a*
=de*ignated con*$&er*> and to "re*cri%e energ7 con*$&"tion *tandard* 'or the&6 The
Act "roAide* 'or energ7 con*erAation %$ilding code* 'or e''icient $*e o' energ7 and it*
con*erAation in co&&ercial %$ilding*6 There are al*o "roAi*ion* that ena%le *"eci'ication
o' energ7 con*$&"tion *tandard* 'or noti'ied e($i"&ent and a""liance* and &aking their
la%eling &andator76 #o&e o' the initiatiAe* taken 'or energ7 con*erAation are giAen
%elo):
'nternational *nerg8 (utloo;-.ighlights
The 8orld &arketed energ7 con*$&"tion i* "roHected to increa*e %7 F! "ercent
'ro& 200B to 2006 Total energ7 de&and in the non-524, co$ntrie* increa*e*
%7 9F "ercent, co&"ared )ith an increa*e o' 2B "ercent in the 524, co$ntrie*6
The )orld &arketed energ7 con*$&"tion i* "roHected to gro) %7 F0 "ercent oAer the
200F to 200 "eriod6 Total )orld energ7 $*e ri*e* 'ro& B62 ($adrillion Briti*h ther&al
$nit* .Bt$/ in 200F to F6 ($adrillion Bt$ in 201F and then to 69F ($adrillion Bt$ in
2006 +lo%al energ7 de&and gro)* de*"ite the *$*tained high )orld oil "rice* that are
"roHected to "er*i*t oAer the long ter&6
;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The &o*t ra"id gro)th in energ7 de&and 'ro& 200F to 200 i* "roHected 'or nation*
o$t*ide the 5rgani?ation 'or 2cono&ic 4oo"eration and ,eAelo"&ent .non-524,
nation*/6 Total non-524, energ7 de&and increa*e* %7 ;F "ercent in the IEO2008
"roHection, a* co&"ared )ith an increa*e o' 19 "ercent in 524, energ7 $*e6 The ro%$*t
gro)th in de&and a&ong the non-524, nation* i* largel7 the re*$lt o' *trong "roHected
econo&ic gro)th6 3n all the non-524, region* co&%ined, econo&ic actiAit7Ra*
&ea*$red %7 +,P in "$rcha*ing "o)er "arit7 ter&*Rincrea*e* %7 F62 "ercent "er 7ear
on aAerage, a* co&"ared )ith an aAerage o' 26 "ercent "er 7ear 'or the 524,
co$ntrie*6

The IEO2008 "roHect* increa*ed )orld con*$&"tion o' &arketed energ7 'ro& all '$el
*o$rce* oAer the 200F to 200 "roHection "eriod6 Fo**il '$el* .li($id '$el* and other
"etrole$&, nat$ral ga*, and coal/ are eG"ected to contin$e *$""l7ing &$ch o' the energ7
9
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
$*ed )orld)ide6 :i($id* *$""l7 the large*t *hare o' )orld energ7 con*$&"tion oAer the
"roHection "eriod, %$t their *hare 'all* 'ro& ! "ercent in 200F to "ercent in 2006
AAerage )orld oil "rice* in eAer7 7ear *ince 200 haAe %een higher than the aAerage 'or
the "reAio$* 7ear6 Price* in 200! )ere nearl7 do$%le the 200 "rice* in real ter&*6 3n the
*econd ($arter o' 200; "rice* ro*e '$rther, eGceeding T10 "er %arrel in -a7, )hen the7
)ere )ell a%oAe the hi*torical, in'lation-adH$*ted record "rice 'or a %arrel o' oil, )hich
)a* *et in the earl7 19;0*6 A Aariet7 o' 'actor* haAe ca$*ed oil "rice* to increa*e,
incl$ding *trong de&and gro)th in non-524, A*ia and the -iddle 2a*t, no gro)th in
"rod$ction *ince 200F 'ro& the &e&%er* o' the 5rgani?ation o' the Petrole$& 2G"orting
4o$ntrie* .5P24/, ri*ing co*t* 'or oil eG"loration and deAelo"&ent, acro**-the-%oard
increa*e* in co&&odit7 "rice*, and a )eaker 06#6 dollar6
:i($id* are eG"ected to re&ain the )orldI* do&inant energ7 *o$rce thro$gho$t the
IEO2008 "roHection, giAen their i&"ortance in the tran*"ortation and ind$*trial end-$*e
B0
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
*ector*6 8orld $*e o' li($id* and other "etrole$& gro)* 'ro& ;66 &illion %arrel* oil
e($iAalent "er da7 in 200F to 9F6! &illion %arrel* "er da7 in 201F and 1126F &illion
%arrel* "er da7 in 2006 The li($id* *hare o' )orld energ7 con*$&"tion decline* thro$gh
200, ho)eAer, a* other '$el* re"lace li($id* )here "o**i%le6 3n &o*t region* o' the
)orld, the role o' li($id '$el* o$t*ide the tran*"ortation *ector contin$e* to %e eroded6
:i($id* re&ain the &o*t i&"ortant '$el* 'or tran*"ortation, %eca$*e there are 'e)
alternatiAe* that can co&"ete )idel7 )ith li($id '$el*6 5n a glo%al %a*i*, the
tran*"ortation *ector acco$nt* 'or !B "ercent o' the total "roHected increa*e in li($id* $*e
'ro& 200F to 200, )ith the ind$*trial *ector acco$nting 'or Airt$all7 all o' the
re&ainder6
To &eet the incre&ent in )orld li($id* de&and in the IEO2008, total *$""l7 in 200 i*
"roHected to %e 2;62 &illion %arrel* "er da7 higher than the 200F leAel o' ;B6 &illion
%arrel* "er da76 3t a**$&e* that 5P24 "rod$cer* )ill choo*e to &aintain their &arket
*hare o' )orld li($id* *$""l7, and that 5P24 &e&%er co$ntrie* )ill inAe*t in
incre&ental "rod$ction ca"acit7 *o that their conAentional oil "rod$ction re"re*ent*
a""roGi&atel7 B0 "ercent o' total glo%al li($id* "rod$ction thro$gho$t the "roHection6
3ncrea*ing Aol$&e* o' conAentional li($id* .cr$de oil and lea*e conden*ate*, nat$ral ga*
"lant li($id*, and re'iner7 gain/ 'ro& 5P24 &e&%er* contri%$te 126B &illion %arrel* "er
da7 to the total increa*e in )orld li($id* "rod$ction, and conAentional li($id* *$""lie* 'ro& non-
5P24 co$ntrie* add another ;66 &illion %arrel* "er da76
B1
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
0nconAentional re*o$rce* .incl$ding oil *and*, eGtra-heaA7 oil, %io'$el*, coal-to-li($id*,
and ga*-to-li($id*/ 'ro& %oth 5P24 and non-5P24 *o$rce* are eG"ected to %eco&e
increa*ingl7 co&"etitiAe6 8orld "rod$ction o' $nconAentional re*o$rce*, )hich totaled
onl7 26F &illion %arrel* "er da7 in 200F, increa*e* to 96! &illion %arrel* "er da7 in 200,
acco$nting 'or 9 "ercent o' total )orld li($id* *$""l7 in 200 on an oil e($iAalent %a*i*6
Bio'$el*, incl$ding ethanol and %iodie*el, )ill %e an increa*ingl7 i&"ortant *o$rce o'
$nconAentional li($id* *$""lie*, largel7 %eca$*e o' the gro)th in 06#6 %io'$el*
"rod$ction6 3n the IEO2008, the 0nited #tate* acco$nt* 'or nearl7 one-hal' o' the ri*e in
)orld %io'$el* "rod$ction, at 162 &illion %arrel* "er da7 in 2006
8orld)ide nat$ral ga* con*$&"tion in the IEO2008 increa*e* 'ro& 10B trillion c$%ic 'eet
in 200F to 1F; trillion c$%ic 'eet in 2006 1at$ral ga* i* eG"ected to re"lace oil )hereAer
"o**i%le6 -oreoAer, %eca$*e nat$ral ga* co&%$*tion "rod$ce* le** car%on dioGide than
coal or "etrole$& "rod$ct*, goAern&ent* &a7 enco$rage it* $*e to di*"lace the other
'o**il '$el* a* national or regional "lan* to red$ce greenho$*e ga* e&i**ion* %egin to %e
i&"le&ented6 1at$ral ga* i* eG"ected to re&ain a ke7 energ7 *o$rce 'or ind$*trial *ector
$*e* and electricit7 generation thro$gho$t the "roHection "eriod6 The ind$*trial *ector,
B2
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
)hich i* the )orldI* large*t con*$&er o' nat$ral ga*, acco$nt* 'or B "ercent o' "roHected
nat$ral ga* $*e in 2006 3n the electric "o)er *ector, nat$ral ga* i* an attractiAe choice 'or
ne) generating "lant* %eca$*e o' it* relatiAe '$el e''icienc76 2lectricit7 generation
acco$nt* 'or F "ercent o' the )orldI* total nat$ral ga* con*$&"tion in 2006
-$ch o' the )orldI* gro)ing de&and 'or nat$ral ga* i* "roHected to %e &et %7 increa*ed
"rod$ction 'ro& non-524, nation*6 3n the IEO2008, non-524, co$ntrie* acco$nt 'or
&ore than 90 "ercent o' the )orldI* total gro)th in "rod$ction 'ro& 200F to 200 6
8orld net electricit7 generation nearl7 do$%le* in the IEO2008, 'ro& a%o$t 1!6 trillion
kilo)att ho$r* in 200F to 2B6B trillion kilo)att* in 201F and 6 trillion kilo)attho$r* in
2006 Total electricit7 generation in the non-524, co$ntrie* increa*e* %7 an aAerage o'
B60 "ercent "er 7ear 'ro& 200F to 200, a* co&"ared )ith a "roHected aAerage increa*e o'
16 "ercent "er 7ear 'or 524, electricit7 generation6
4oal and nat$ral ga* acco$nt 'or the large*t incre&ent* in '$el con*$&"tion 'or electricit7
generation oAer the "roHection "eriod6 The 61-"ercent "roHected ann$al gro)th rate 'or
B
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
coal-'ired electricit7 generation )orld)ide i* eGceeded onl7 %7 the 6!-"ercent rate 'or
nat$ral ga*-'ired generation .Fig$re 6/6 #$*tained high "rice* 'or oil and nat$ral ga* &ake
coal-'ired generation &ore attractiAe econo&icall7, e*"eciall7 'or coal-rich nation* like
4hina, 3ndia, and the 0nited #tate*6
2lectricit7 generation 'ro& n$clear "o)er i* "roHected to increa*e 'ro& a%o$t 266 trillion
kilo)attho$r* in 200F to 6; trillion kilo)attho$r* in 200, a* concern* a%o$t ri*ing 'o**il
'$el "rice*, energ7 *ec$rit7, and greenho$*e ga* e&i**ion* *$""ort the deAelo"&ent o'
ne) n$clear generation6 Higher ca"acit7 $tili?ation rate* haAe %een re"orted 'or &an7
eGi*ting n$clear 'acilitie*, and it i* antici"ated that &o*t o' the older n$clear "o)er "lant*
in the 524, co$ntrie* and non-524, 2$ra*ia )ill %e granted eGten*ion* to their
o"erating liAe*6 #till, there i* con*idera%le $ncertaint7 a**ociated )ith n$clear "o)er6
High "rice* 'or oil and nat$ral ga*, al*o enco$rage eG"anded $*e o' rene)a%le '$el*6
Rene)a%le energ7 *o$rce* are attractiAe 'or enAiron&ental rea*on*, e*"eciall7 in
co$ntrie* )here red$cing greenho$*e ga* e&i**ion* i* o' "artic$lar concern6 +oAern&ent
"olicie* and incentiAe* to increa*e the $*e o' rene)a%le energ7 *o$rce* 'or electricit7
generation are eG"ected to enco$rage the deAelo"&ent o' rene)a%le energ7 eAen )hen it
cannot co&"ete econo&icall7 )ith 'o**il '$el*6 8orld)ide, the con*$&"tion o'
h7droelectricit7 and other rene)a%le energ7 *o$rce* increa*e* %7 261 "ercent "er 7ear in
the IEO2008 'ro& F ($adrillion Bt$ in 200F to F9 ($adrillion Bt$ in 2006
BB
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
45-PA1D PR5F3:2
45-PA1D PR5F3:2
(+*, ",'D C(,(,A)'($ (F '$D'A %'M')*D ((+*,",'D) i* the
4entral tran*&i**ion $tilit7 o' 3ndia )hich "o**e** one o' the large*t tran*&i**ion
net)ork in the )orld6 3ncor"orated in 5cto%er 19;9, toda7 it o)n* and o"erate* oAer
B0,000 circ$it k&* o' 2H< tran*&i**ion line* along )ith 6! *$%-*tation* haAing oAer
,20 -<A tran*'or&ation ca"acit76 A%o$t one third .0,000 -8/ o' the total
generating ca"acit7 in 3ndia i* tran*&itted thro$gh P582R+R3, *7*te&6 P582R+R3,
take* "ride in &aintaining high tran*&i**ion *7*te& aAaila%ilit7 and i* ranked a&ong*t
to" *iG tran*&i**ion $tilitie* in the )orld6 3t ha* achieAed a *7*te& aAaila%ilit7 o' oAer
9;J d$ring 2000-016 P582R+R3, i* al*o o"erating all the 'iAe R:,4* 'or real ti&e
&onitoring and e''icient grid &anage&ent6
4on*idering it* inherent *trength o' tran*&i**ion in'ra*tr$ct$re, P582R+R3, ha*
diAer*i'ied into teleco&&$nication and ha* o%tained 3n'ra*tr$ct$re ProAider33 .3P-33/,
3#P - A, 1ational :ong ,i*tance .1:,/ :icen*e 'ro& ,5T6 P582R+R3, ha*
e*ta%li*hed 20,000 9&* o' %road %and teleco& net)ork on it* tran*&i**ion in'ra*tr$ct$re
"roAided 'or the link* connecting all &etro* and &aHor citie* acro** the co$ntr76
P582R+R3, i* "re*entl7 lea*ing %and)idth ca"acit7 to Aario$* 1:,, 3:,, 4ell$lar
5"erator*, 3#P, 4all 4entre and Aario$* +oAt6 Agencie* on it* net)ork
P582R+R3,* 1et)ork de"lo7* 2 )aAelength ,8,- *7*te&, *cala%le to 12;
)aAelength *7*te&, connecting all the &etro*6
P582R+R3,* Teleco& can cater to 7o$r re($ire&ent 'or Aario$* a""lication* re($ired
'or 7o$r co&"an76 8e haAe o$r credit eG"erience* in thi* 'ield and take $" an7
BF
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
challenging Ho% a)arded to $*6 The 'ollo)ing *erAice* are aAaila%le on P582R+R3,*
net)ork:
21@2@,#@#T-1@#T-B@#T-16 :ea*ed :ine
-$lti-*ite :A1 3nterconnect "l$* 3nternet Acce**
:ea*ing o' %and)idth ca"acit7
2thernet "riAate lea*ed line .Point to "oint and "oint to &$lti "oint/
<irt$al :ocal Area 1et)ork .<:A1*/
Broad%and 3nternet :ea*ing o' %and)idth ca"acit7
P582R+R3, i* accredited )ith 3#5 9001 S$alit7 #7*te&* 4erti'icate, %7 1SA
S$alit7 #7*te& Regi*ter 096 3t i* eGec$ting &an7 a t$rnke7 con*$ltanc7 contract* and it*
client* incl$de -er? -cllelan 09, Price 8aterho$*e, 069 N Aario$* #tate 2lectricit7
Board* in 3ndia6
3n 2lectricit7 :a)* A&end&ent Act )hich )a* "a**ed in the 7ear 199;6 QTran*&i**ionQ
%eca&e *e"arate actiAit7 and P582R+R3, )a* recogni*ed a* 4T0 to
0ndertake tran*&i**ion o' energ7 thro$gh inter-*tate tran*&i**ion6
,i*charge all '$nction* o' "lanning and co-ordination related to inter-*tate
tran*&i**ion6
2Gerci*e *$"erAi*ion N control 'or inter-*tate tran*&i**ion *7*te& N o"erate
R:,4*6
3t )a* entr$*ted )ith the ta*k to $ndertake tran*&i**ion o' energ7 tho$gh inter *tate
tran*&i**ion *7*te& %7 con*tr$ction, o"eration and &aintenance o' 2Gtra High <oltage
A4 and High <oltage ,4 Tran*&i**ion line*, *$%*tation*, :oad ,e*"atch 4entre* and
co&&$nication 'acilitie*6
B6
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
A,*AS (F *G*,)'S*
3&"le&entation o' H<A4 N H<,4 tran*&i**ion *7*te&6
5"eration N -aintenance o' 2H< A4 N H<,4 tran*&i**ion *7*te&6
2nerg7 -anage&ent N #4A,A6
:oad ,i*"atch 4enter* o"eration* and co&&$nication6
#che&e* taken $" 'or %ene'it d$ring Cth Plan :
- Tran*&i**ion *che&e*
U #che&e* co&"leted d$ring la*t t)o
7ear*
6,291 ck&
U Schemes targete# /or com1letion
200F-06 F,00; ck&
2006-0! 1,B ck&
$A--,A)$A Status
The goAern&ent on 1
*t
-a7 200;, Th$r*da7 granted K1aAratnaI *tat$* to Po)er+rid
4or"oration )hich )ill giAe the *tate-o)ned tran*&i**ion $tilit7 inde"endence to
decide inAe*t&ent* $" to R* 1,000 crore6 The ne)-'o$nd *tat$* )ill hel" the
co&"an7 to "$*h ahead )ith it* eG"an*ion "lan* and ro"e in "riAate *ector "la7er*
a* "artner* in Aario$* "roHect*6 The con'er&ent o' 1aAratna *tat$* i* in line )ith the
+oAern&entI* "olic7 to allo) *elect 4entral P$%lic #ector 2nter"ri*e* %eco&ing
*igni'icant "la7er* in the econo&ic deAelo"&ent o' the co$ntr7 a* glo%al giant*6 3t i*
al*o in con*onance )ith the 1ational 4o&&on -ini&$& Progra&&e .14-P/
)here%7 +oAern&ent i* co&&itted to
haAe a *trong and e''ectiAe "$%lic *ector6 8ith the grant o' thi* *tat$*, Po)er +rid
4or"oration o' 3ndia :td6 )ill no) haAe '$ll &anagerial and co&&ercial a$tono&7
B!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
*o a* to e''ectiAel7 o"erate in a co&"etitiAe enAiron&ent6 The Po)er +rid
4or"oration o' 3ndia :td6 i* the 4entral Tran*&i**ion 0tilit7 o' the co$ntr7 and ha*
the re*"on*i%ilit7 'or $ndertaking tran*&i**ion o' "o)er thro$gh inter-#tate
tran*&i**ion *7*te&*6
The -ini*tr7 o' Po)er no) ha* three 1aAratna P$%lic #ector 0ndertaking*, 1TP4, PF4
and Po)er +rid 4or"oration o' 3ndia :td6
Po)er+rid ha* e&erged a* one o' the large*t and %e*t-&anaged tran*&i**ion $tilitie* in
the )orld $nder chair&an R P #ingh )ho ha* *erAed the organi*ation 'or a decade6
3n 200!-0;, it co&&i**ioned R* 6,000 crore "roHect*, adding !,F0 k& to it*
net)ork %e*ide* *$%-*tation* and tran*'or&ation ca"acit7 o' &ore than 1,!00 &)6
Mission
2*ta%li*h&ent and o"eration o' Regional and 1ational Po)er +rid* to 'acilitate
tran*'er o' electric "o)er )ithin and acro** the region* )ith Relia%ilit7, #ec$rit7 and
2cono&7, on *o$nd co&&ercial "rinci"le*6

Mr. ,.. Singh
Chairman & Managing Director
5%HectiAe*
B;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The cor"oration ha* led the 'ollo)ing o%HectiAe* in line )ith it* &i**ion and it* *tat$* a*
=4entral Tran*&i**ion 0tilit7>
0ndertake tran*&i**ion o' energ7 thro$gh 3nter #tate Tran*&i**ion #7*te&
,i*charge all '$nction* o' "lanning and coordination relating to 3nter-#tate
Tran*&i**ion *7*te& )ith:
16 #tate Tran*&i**ion 0tilitie*P
26 4entral goAern&entP
6 #tate +oAern&entP
B6 +enerating 4o&"anie*P
F6 Regional 2lectricit7 BoardP
66 A$thorit7P
!6 :icen*ee*P
;6 Tran*&i**ion :icen*ee*P
96 An7 other "er*on noti'ied %7 the 4entral +oAern&ent on hi* %ehal'6
2Gerci*e *$"erAi*ion and control oAer the 3nter-#tate Tran*&i**ion *7*te&
2''icient 5"eration and -aintenance o' Tran*&i**ion #7*te&
2*ta%li*h and o"erate all Regional :oad ,e*"atch 4entre and 4o&&$nication
'acilitie*
To 'acilitate PriAate *ector "artici"ation on Tran*&i**ion #7*te& thro$gh
3nde"endent PriAate Tran*&i**ion 4o&"an7, Eoint <ent$re*
B9
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Areas o/ o1eration
5. Develo1ment o/ 'nter-State transmission S8stems
Planning N ,e*ign
4on*tr$ction
S$alit7 A**$rance N 3n*"ection
5"eration N -aintenance
6. "ri# Management
2*ta%li*h&ent o' &odern :oad ,e*"atch 4entre*
Real-ti&e +rid 5"eration
5"ti&$& *ched$ling N di*"atch
2nerg7 acco$nting incl$ding *ettle&ent*
:. Diversi/ication
Broad%and Teleco& #erAice*6
#$%-tran*&i**ion
,i*tri%$tion
R$ral 2lectri'ication
$ational o!er "ri#
A "er*"ectiAe tran*&i**ion "lan ha* %een eAolAed and "$t into i&"le&entation %7
P582R+R3, 'or e*ta%li*h&ent o' an integrated 1ational Po)er +rid, in a "ha*ed
&anner, 'or *trengthening the regional grid* .'iAe grid* *tr$ct$red on geogra"hical
contig$it7 %a*i*/ and to *$""ort the generation ca"acit7 addition "rogra& o' a%o$t
1,00,000 -8 d$ring C N C3 Plan*6 3nter-regional "o)er tran*'er ca"acit7 o' 9F00 -8
%7 the end o' FD 0B-0F i* eG"ected to %e enhanced to 0,000 -8 %7 7ear 20126
F0
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
For creation o' *$ch a 1ational +rid, total inAe*t&ent re($ire&ent in the central
tran*&i**ion *ector d$ring C N C3 "lan "eriod* ha* %een enAi*aged to %e a%o$t R*6
!1,000 4rore .a%o$t 0#, 16 %illion/6 5$t o' thi*, P582R+R3, "lan* to inAe*t a%o$t
R*6 F0,000 4rore .!0J/, )hile the %alance o' R*6 21,000 4rore .0J/ i* enAi*aged to %e
&o%ili?ed thro$gh PriAate Partici"ation6
"ri# Management an# S8stem (1eration
3t incl$de* "lanned eG"an*ion o' regional grid* in an accelerated &anner and their
integration to 'or& a *trong N Ai%rant 1ational +rid )hich "o*e* great challenge* in +rid
5"eration N -anage&ent6 For e''icient +rid &anage&ent, P582R+R3, ha* ado"ted,
"r$dent o"erational "ractice*,
$ndertaken "reAentiAe &aintenance,
'acilitated i&"le&entation o' AAaila%ilit7 Ba*ed Tari'' .ABT/ N Free -ode
+oAernor 5"eration .F-+5/,
$ndertaken &oderni?ation o' Regional :oad ,e*"atch N 4o&&$nication
*7*te&*,
"roAided inten*iAe training and de"lo7ed eG"ert &an"o)er6
All the*e haAe led to &arked i&"roAe&ent in grid "ara&eter* like Aoltage N 're($enc7,
oAer a "eriod o' ti&e6
F1
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Teleco& #erAice*
F2
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
F
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
FB
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
%*AS'$" (F BA$D+'D). ($ (+*,",'DHS )*%*C(M $*)+(,K
The inherent 4o&&$nication in'ra*tr$ct$re co$"led )ith right o' )a7 along it* eGten*iAe
Po)er Tran*&i**ion net)ork haAe &ade it "o**i%le to leAerage the*e characteri*tic* in
creating conAergence o' Po)er Tran*&i**ion and Teleco& technologie*6
P582R+R3,I* teleco& net)ork "roAide* a ro%$*t teleco& high)a7 at a''orda%le co*t
)ith $ltra &odern and eco-'riendl7 i&"le&entation techni($e*6 P582R+R3, i* one o'
the 'e) teleco& "la7er* )ith a &arked "re*ence in re&ote area* Ai?6 1orth 2a*tern
Region, Ea&&$ and 9a*h&ir , Hi&achal Prade*h, etc6
Po)er +rid 4or"oration o' 3ndia :td6, the 4entral Tran*&i**ion 0tilit7 o' the co$ntr7, a
leading P$%lic #ector 0ndertaking o)n*, o"erate* and &aintain* one o' the large*t "o)er
tran*&i**ion .VF0,000 ckt k&*/ net)ork in the )orld6 P582R+R3, ha* diAer*i'ied into
teleco&&$nication and ha*:
1ational :ong ,i*tance :icence and
3nternet #erAice ProAider3#P .4ategor7 A/ :icence
P582R+R3, ha* nation )ide %ack%one net)ork to "roAide %road %and ca"acit7 to
Aario$* teleco& *erAice "roAider* like 3#PI*, 4ell$lar o"erator*, Ba*ic *erAice "roAider*,
1:,5I*, 3:,I*, Paging o"erator*, 4all centre*, tele-&edicine, +oAern&ent ,e"art&ent*,
Broadca*ter*, 4or"orate* etc6 'or Aoice, data and Aideo and al*o other higher Aal$e added
teleco& *erAice*6
P582R+R3, ha* alread7 e*ta%li*hed a%o$t 19000 9&* o' o"tic 'i%re net)ork
connecting Aario$* citie* 6 Band)idth can %e i&&ediatel7 "roAided 'or the link*
connecting all &etro* and &aHor citie* <i?6 ,elhi, -$&%ai, 4hennai, 9olkata,
Bangalore , H7dera%ad , <iHa7a)ada , <i*akha"atna& , 4ochin , P$ne, Ah&eda%ad,
<adodara, Ea&&$ , 4handigarh , #hi&la, Eai"$r, :$ckno) , 9an"$r , Allaha%ad ,
<arana*i , Patna , Bh$%ane*h)ar, Ea&*hed"$r , ,$rga"$r , and all 1orth 2a*tern #tate*6
FF
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
2$'I2* F*A)2,*S (F (+*,",'DHS )*%*C(M $*)+(,K
-o*t o' the P582R+R3,I* o"tic 'i%re %ack%one net)ork i* laid oAerhead on the eGtra
high Aoltage Po)er tran*&i**ion line* and there'ore it o''er* di*tinct adAantage oAer the
$ndergro$nd o"tic 'i%re net)ork in ter&* o' ro%$*tne**, Aandali*& "roo', rodent and
ter&ite "roo' etc, th$* o''ering high relia%ilit76 The other adAantage* o' lea*ing
%and)idth ca"acit7 on P582R+R3,I* Teleco& ro$te are:
3n*tant %and)idth allocation on P582R+R3,I* Teleco& ro$te
2nd to end connectiAit7
3n*tant $"gradation to higher ca"acit7
Better #erAice :eAel
#erAice* catering to the *"eci'ic need* o' the c$*to&er*
High relia%ilit7, high ($alit7 *erAice in a co*t e''ectiAe &anner
Customers o/ )elecom Services
Aircel B$*ine** #ol$tion*.,i*hnet 8irele**/
Bharat #anchar 1iga& :td6 .B#1:/
Bharti Airtel :td
2ric**on 3ndia PAt6 :td6
i2i 1et)ork*
3dea 4ell$lar :td6
Reliance 4o&&$nication* :td6
Tata Tele*erAice* :td6
<ide*h #anchar 1iga& :td6 .<#1:/
F6
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
o!er "ri#Hs ') 9i#
According to #6 1ara*i&han, 4hie' -anager, 3T, Po)er +rid 4or"oration o' 3ndia, =3T
ada"tation i* i&"ortant 'or "roli'ic %$*ine** 'lo) in toda7I* )orld6 8e are con*idering 3T
a* a "roactiAe tool 'or achieAing %e*t re*$lt* in %$*ine** deAelo"&ent and *$*taina%ilit76>
Toda7 &an7 P$%lic #ector 0ndertaking* in india %elieAe in enhancing their %$*ine** )ith
3T6
3T a""lication* "la7* a Aer7 critical role in the *$cce** o' an7 organi*tionP 3n*"ection
-anage&ent #7*te&, a B2B 8e% a""lication, red$ce* in*"ection ti&e 'ro& three )eek*
to three da7*6 Then there are enter"ri*e-)ide Financial A""lication #7*te&, Attendance
-anage&ent #7*te&, #4A,A and 2-# 'or grid o"eration )hich &ake the *7*te& &ore
e''icient and e''ectiAe6
3T i* "re*ent eAer7)here in Po)er +rid6,e"art&ent* like Finance, HR, S$alit7 N
3n*"ection, 5"eration #erAice*, +rid o"eration and -aterial -anage&ent are 'ore-
r$nner* in adAanced in'ra*tr$ct$re6
Po)er +rid ha* 8e%-ena%led it* 'inance a""lication*6 The*e 8e%-%a*ed a""lication*
co&"ri*e all 'inance &od$le*, a 8e%-%a*ed in*"ection &anage&ent *7*te& and e-
%idding 'or *hort-ter& o"en acce**
Po)er +rid ha* 8e%-ena%led it* 'inance a""lication*6 The*e 8e%-%a*ed a""lication*
co&"ri*e all 'inance &od$le*, a 8e%-%a*ed in*"ection &anage&ent *7*te& and e-%idding
'or *hort-ter& o"en acce**6 1o), Po)er +rid i* looking 'or eG"an*ion o' thi* a""lication6
6
F!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
o!er "ri# Cor1oration o/ 'n#ia %t#. atna o//ice
1a&e o' the Head o' ,e"art&ent* .H5,/ o' Aario$* de"art&ent* o' Po)er +rid
4or"oration o' 3ndia :td6 2RHS-1, Patna, Bihar
F;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
ED Cell
Mr. J.P.
Singh
Engineering
Mr. U.P.
Sinha
PESM
Mr. A.K.
Verma
Contract
and
Material
Mr. S.K.
Bhowal
Law
Mr. R.C.
Rai
DMS
Mr. Arun
Kumar
Vigilance
HRM
Mr. A.P.
Singh
O&M
Mr. L. Hari
Commercial
Mr. S. Prasad
F&A
Mr. S
Bhattacher
ee
"C'%
S*C($D-anal8sis
Anal8sis o/ Financial Statement /or the 8ear en#ing :5
st
March 633> an# 633?
Basis o/ 1re1aration o/ Financial Statements
The 'inancial *tate&ent* are "re"ared $nder the hi*torical co*t conAention and in
accordance )ith the generall7 acce"ted acco$nting "rinci"le and a""lica%le Acco$nting
#tandard* in 3ndia6 The 'inancial *tate&ent* adhere to the releAant "re*entational
re($ire&ent o' the 4o&"anie* Act, 19F66
"ro!th in )ransmission
The long ter& "lan o' Po)er +rid i* oriented to)ard* i&"le&entation o' generation
eAal$ation *che&e*, *trengthening o' regional grid*, deAelo"&ent o' an integrated
1ational +rid )ith 'leGi%ilit7 'or "o)er tran*'er 'ro& one Region to another and *etting
$" the re($i*ite :oad ,i*"atch 'acilitie* 'or real ti&e grid o"eration6 Thi* "lan )a*
i&"le&ented kee"ing in Aie) the large incre&ental ca"acit7 addition re($ire&ent o'
100000 -8 in 10
th
and 11
th
Plan* and to '$l'ill the &acro o%HectiAe o' Po)er #ector i6e6
Po)er to all %7 20126
)o translate the mission o/ creation o/ a national "ri# 98 the 8ear 6356 into realit8,
1o!er gri# has0
,$ring the "eriod o' three 7ear* o' 10
th
Plan, co&"leted the *tringing o' 10600
4kt6 9&*6 o' tran*&i**ion line*
The inter-regional tran*'er ca"acit7 o' 9F00 -8 ha* %een e*ta%li*hed6
4on*i*tentl7 &aintained the tran*&i**ion *7*te& aAaila%ilit7 oAer 996FJ at "ar
)ith the 3nternational $tilitie*6
F9
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
#85T A1A:D#3#
#85T A1A:D#3#
(11ortunities0 -
16 H$ge 3nAe*t&ent leading to greater de&and o' good* and *erAice*6
26 ,e&and leading to 3nd$*tr7 o"rating at '$ll N oAer ca"acit76
6 Better Price reali?ation6
B6 2arl7 %ird* to learn 'a*ter and th$* achieAe re"eat order*6
F6 For&ation o' %$*ine** gro$"* and tie-$"* 'or Hoint %$dding6
)hreats0 -
16 P$rcha*e* "re'erence &a7 %e eGtended to di*tri%$tion *ector6
26 3ncrea*e in no6 o' *&all contractor* leading to "rice )ar6
6 2&ergence o' ne) "la7er* in the &arket like #chneider etc6
+ea;ness0 -
16 The "roc$re&ent "roce** in the co&"anie* i* c$&%er*o&e and *$%Hect to a$diting6
26 :o) eG"o*$re to the need* N d7na&ic* o' di*tri%$tion %$*ine**6
6 Role clarit7 on the re($ire&ent o' %eing an e($i"&ent *$""lier or a *ol$tion
"roAider6
B6 Acce"tance o' c$*to&er* to eGec$te lo) Aal$e high Aol$&e Eo%*6
Strengths0 -
16 +ood cor"orate 3&age6
26 4o&"lete range o' "rod$ct 'or tran*&i**ion N di*tri%$tion6
6 2*ta%li*hed %rand na&e6
B6 #trong N )ide net)ork* o' &an"o)er acro** 3ndia6
F6 4on*idered to %e haAing technolog7 N de*ign a%ilit76

60
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
B$*ine** deAelo"&ent
Po)er +rid reali?ed &ore than R*6122 cr6 and 1FF d$ring the FD 200B-0F and FD 200F-
06 re*"ectiAel76
3n the do&e*tic area, the 4o&"an7 ha* *ec$red &ore than B0 con*$ltanc7 a**ign&ent*
)ith total order %ooking o' R*61B0 cr6
Re*earch and ,eAelo"&ent
Po)er grid had al)a7* "$r*$ed Re*earch and ,eAelo"&ent e''ort* in the 'ield o' ne)
technologie* in tran*&i**ion *7*te& to re&ain at "ar )ith the international *tandard*6
1e) technologie* are %eing a%*or%ed %7 Po)er +rid in a "roactiAe &anner *o a* to
achieAe the o%HectiAe o'
:o)ering tran*&i**ion co*t*
Red$ction o' lo**e*
5"ti&$& $tili?ation o' the aAaila%le tran*&i**ion a**et* and
4on*erAation o' energ7
61
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Anal7*i* o' Financial #tate&ent* 'or the 7ear 200B-0F
62
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
6
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The *hare ca"ital o' the co&"an7 re&ain* the *a&e %$t the re*erAe and *$r"l$* *ho)* a increa*e
o' ! "ercent in the 7ear 200F a* co&"ared to the 7ear 200B6 #i&ilarl7 the "ortion o' $n*ec$red
loan* ha* al*o decrea*ed at the end o' the 7ear 200F in the total a&o$nt o' loan '$nd* )hich
*ho)* that the co&"an7 i* no) o"ting 'or &ore o' *ec$red loan*6 The co&"an7 ha* al*o created
de%ent$re rede&"tion re*erAe to the eGtent o' 2F "ercent o' the a&o$nt to %e redee&ed in each
7ear %7 e($all7 *"reading the a&o$nt oAer the n$&%er o' 7ear* %e'ore the 7ear o' &at$rit76 The
co&"an7 ha* al*o created adAance again*t de"reciation to $" to R*66106 cr6 8hich *ho)* a
increa*e o' FB "ercent a* co&"ared to 7ear 200B6 The 'iGed a**et* o' the co&"an7 haAe al*o
increa*ed oAer the "eriod6 The ca"ital )ork-in-"rogre** o' the co&"an7 ha* al*o increa*ed %7 F9
"ercent at the end o' the 7ear 200F a* co&"ared to 200B6 The inAe*t&ent* o' the co&"an7 haAe
al*o increa*ed %$t it i* a &inor increa*e o' 2 "ercent onl76 The de%tor* and the &i*cellaneo$*
eG"endit$re o' the co&"an7 haAe al*o red$ced %7 ! "ercent and 2 "ercent re*"ectiAel76 The
ca*h and %ank %alance o' the co&"an7 ha* *ho)n a decrea*e o' 22 "ercent at the end o' the 7ear
200F a* co&"ared to 200B6
roDect 'm1lementation
6B
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
,$ring the 7ear 200B-0F, 16 ne) "roHect* )orth a%o$t R*66100 cr6, inAolAing 9200 4kt6 9&*6 o'
tran*&i**ion line*, 1; ne) *$%-*tation* and tran*'or&ation ca"acit7 o' &ore than 12,00 -<A
)ere a""roAed and taken $" 'or i&"le&entation6 3n all, a%o$t F0 tran*&i**ion "roHect* co*ting
R*61B000 cr6 are c$rrentl7 $nder Aario$* *tage* o' i&"le&entation and &o*t o' the "roHect* are
"rogre**ing either ahead o' *ched$le or on *ched$le6
Fun# Mo9ilisation
3n FD 200B-0F the co&"an7 $ndertook 4a"ital 3nAe*t&ent o' R*6221 cr6 For the ne) ca"ital
inAe*t&ent, R*6!F0 cr6 )a* &o%ili?ed Aia do&e*tic %ond, R*6FF0 cr6 a* )orking ca"ital loan 'ro&
the %ank* and the %alance re($ire&ent )a* &et thro$gh loan* 'ro& &$ltilateral '$nding agencie*
and internal re*o$rce* o' the co&"an76
6F
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The &aHor *o$rce* o' the '$nd* 'or the co&"an7 )ere %ond* and other* )hich contri%$te to
aro$nd 1 "ercent o$t o' the total6 The neGt &aHor *o$rce )a* the Aario$* re*erAe* that the
co&"an7 ha* created d$ring the 7ear and the 'oreign loan* that the7 )ere a%le to get 'ro& the
8orld Bank and A*ian ,eAelo"&ent Bank6 The loan* 'ro& other 'inancial in*tit$tion* *ho) a
&ere contri%$tion o' 66B "ercent in the total *o$rce* o' '$nd6 The &aHor "ortion o' their '$nd i*
attri%$te* in the "$rcha*e o' 'iGed a**et* )hich i* nearl7 !0 "ercent6 The a&o$nt *"ent on the
"$rcha*e o' c$rrent a**et* i* lea*t )hich i* eAen le** than 1 "ercent6 1earl7 ; "ercent o' the '$nd*
)ere a""lied in Aario$* t7"e* o' inAe*t&ent*6 1earl7 1F and 6 "ercent o' the '$nd* )ere a""lied
'or the ca"ital )ork-in-"rogre** and 'or the "$rch*e o' other con*tr$ction *tore*6
66
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
3nco&e Break-0"
The &aHor *o$rce o' their inco&e co&e* 'ro& the Aario$* Tran*&i**ion charge*, )hich i* nearl7
e($al to ;0 "ercent6 The other &aHor *o$rce thro$gh )hich the7 receiAe their inco&e i* the
intere*t inco&e on the #tate goAern&ent %ond* )hich i* e($al to 661 "ercent6 The other *o$rce*
o' their inco&e are #hort Ter& 5"en Acce** inco&e, :ea*e inco&e, 4on*$ltanc7, ProHect
&anage&ent and #$"erAi*ion 'ee*, and other inco&e*6
The "ro'it a'ter taG ha* *ho)n a increa*e o' F "ercent at the end o' the 7ear 200F a* co&"ared to
the 7ear 200B6 The earning "er *hare ha* al*o increa*ed 'ro& 2B! "er *hare to 2F! "er *hare
)hich contri%$te* to increa*e in the *hareholder* )ealth &aGi&i?ation6
B$*ine** ,eAelo"&ent ActiAit7 o' Po)er +rid ha* al*o *ho)n a *"ectac$lar gro)th d$ring the
7ear in ter&* o' reAen$e reali?ation .&ore than R*612! cr6 d$ring the FD 200B-0F a* again*t
R*6! cr6 in FD 200-0B6
6!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
6;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
'ncome Statement
69
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The "ro'it a'ter taG o' the co&"an7 increa*ed %7 nearl7 F "ercent in the FD 200B-0F a* co&"ared
to FD 200-0B i6e6 it increa*ed 'ro& !B;620 cr6 to !;F6F2 cr6 4o&"an7 d$ring the 7ear ha*
eGhi%ited a *"ectac$lar gro)th on 'inancial 'ront d$ring 200B-0F achieAing a t$rnoAer o' R* 2;1
cr6 and net "ro'it o' R* !;6 cr6 a* co&"are to 2;0F cr6 and !B; cr6 re*"ectiAel7 d$ring the FD
200-0B6 ,$ring the 7ear the co&"an7 reali?ed 100 "ercent o' it* d$e* a* again*t 9; "ercent
d$ring "reAio$* 7ear6 Pro'it "er e&"lo7ee al*o increa*ed 'ro& 106B; cr6 to 162 cr6 in FD 200B-
0F a* co&"ared to FD 200-0B6
,atio anal8sis
#o&e i&"ortant ratio* on the 'inancial health and )orking o' the co&"an7 at the end o' la*t t)o
7ear* ending 1
*t
-arch 200F and 1
*t
-arch 2006 are a* $nder:
3&"ortant Ratio* 200B-0F 200F-06
4$rrent ratio 06;2 0661
,e%t-2($it7 ratio 16B9 16B9
Pro'it %e'ore taG to 4a"ital e&"lo7ed F6!! 6696
Pro'it %e'ore taG to 1et )orth 106FB 1260B
Pro'it %e'ore taG to *ale* 661 66;
Pro'it a'ter taG to e($it7 2B6F2 2!6;B
2arning "er *hare 2F! 0!
Anal8sis o/ Financial Statements /or the 8ear 633>-3?
!0
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
!1
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
!2
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The *hare ca"ital o' the co&"an7 increa*ed %7 1 "ercent and the re*erAe and *$r"l$*
al*o *ho)* a increa*e o' 10 "ercent in the 7ear 2006 a* co&"ared to the 7ear 200F
there%7 increa*ing the total *hareholder* '$nd %7 nearl7 11 "ercent6 #i&ilarl7 %oth the
"ortion o' *ec$red loan* and $n*ec$red loan* ha* al*o increa*ed %7 16 "ercent and B
"ercent re*"ectiAel7 at the end o' the 7ear 2006 in the total a&o$nt o' loan '$nd* )hich
*ho)* that the co&"an7 i* no) o"ting 'or &ore o' *ec$red loan*6 The co&"an7 ha* al*o
created adAance again*t de"reciation to $" to R*6;2262 cr6 d$ring the 7ear )hich *ho)*
a increa*e o' nearl7 F "ercent a* co&"ared to 7ear 200B-0F6 The 'iGed a**et* o' the
co&"an7 ha* al*o increa*ed 'ro& 21906F6 cr6 to 2B;;;62F i6e6 aro$nd 1B "ercent
increa*e oAer the "eriod The ca"ital )ork-in-"rogre** o' the co&"an7 ha* al*o increa*ed
%7 &erel72 "ercent at the end o' the 7ear 20066 The de%tor* and the &i*cellaneo$*
eG"endit$re o' the co&"an7 haAe al*o red$ced %7 "ercent and 0 "ercent re*"ectiAel76
The ca*h and %ank %alance o' the co&"an7 ha* *ho)n a decrea*e o' 2 "ercent at the end
o' the 7ear 2006 a* co&"ared to 200F6
!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Fun# Mo9iliJation
,$ring the FD 200F-06 '$nd* a&o$nting to R* B;1669 cr6 'ro& internal and eGternal
*o$rce* )ere reali?ed and $tili?ed d$ring the 7ear6 3n FD 200F-06 the co&"an7 $ndertook
4a"ital 3nAe*t&ent o' R*6B111 cr6, an increa*e o' a%o$t 900 cr6 .i6e6 2!J/ co&"ared to R*
221 cr6 in FD 200B-0F6 For the ne) ca"ital inAe*t&ent, R*61999 cr6 )a* &o%ili?ed Aia
do&e*tic &arket thro$gh %ond* at Aer7 co&"etitiAe rate*6 The neGt contri%$ting *o$rce o'
'$nd )a* the 'oreign c$rrenc7 loan* and the re*erAe* o' the co&"an7 contri%$ting 2161
"ercent and 26F "ercent re*"ectiAel76 The %alance re($ire&ent )a* &et thro$gh loan*
'ro& &$ltilateral '$nding agencie* and internal re*o$rce* o' the co&"an76 The &ain
a""lication o' '$nd )a* attri%$ted to)ard* the "$rcha*e o' 'iGed a**et*6 ,$ring the 7ear
the 'iGed a**et* o' the co&"an7 increa*ed %7 R* 29F!669 cr6 )hich i* e($al to 1B "ercent
increa*e d$ring the 7ear6The1 "ercent o' the '$nd )a* $tili?ed 'or the ca"ital-)ork-in-
"rogre** and nearl7 10 "ercent to)ard* increa*e in con*tr$ction *tore* and adAance*6
There )a* an increa*e in inAe*t&ent %7 R*62F6699 cr6 Po)er +rid reali?ed 100 "ercent o'
it* d$e* d$ring the 7ear 200F-066 5$t*tanding d$e* a&o$nting to R* 21F cr6 and c$rrent
d$e* a&o$nting to R* 01! cr6 )ere reali?ed d$ring the 7ear6
!B
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
!F
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
!6
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
'ncome Brea;-21
The &aHor *o$rce o' their inco&e co&e* 'ro& the Aario$* Tran*&i**ion charge*, )hich i* nearl7
e($al to ;16!B "ercent6 The other &aHor *o$rce thro$gh )hich the7 receiAe their inco&e i* the
intere*t inco&e on the #tate goAern&ent %ond* )hich i* e($al to 6620 "ercent6 The other *o$rce*
o' their inco&e are #hort Ter& 5"en Acce** inco&e, :ea*e inco&e, 4on*$ltanc7, ProHect
&anage&ent and #$"erAi*ion 'ee*, and other inco&e* )hich contri%$ted 16B9 "ercent, 1610
"ercent, B66 "ercent and F611 "ercent re*"ectiAel76
!!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
o!er to all 98 6356
Po)er +rid ha* "lanned to create a *trong 1ational Po)er +rid in a "ha*ed &anner to
en*$re o"ti&$& $tili?ation o' generating re*o$rce*, con*erAation o' eco-*en*itiAe Right
o' )a7 and 'or haAing 'leGi%ilit7 to acco&&odate $ncertaint7 o' generation "lan*6 For
thi* Po)er +rid ha* identi'ied and i* i&"le&enting Aario$* tran*&i**ion "roHect*
&atching )ith generation ca"acit7 addition in the co$ntr7, in line )ith the Ai*ion o'
"o)er *ector i6e6 o!er to all 98 6356. Pre*entl7, inter-regional "o)er tran*'er ca"acit7
o' 9F00 -8 i* in "lace )hich i* "lanned to %e enhanced to &ore than 9000 -8 %7
2011-12 a* again*t earlier "lanned target o' 0000 -86 Thi* )o$ld lead to red$ction in
ca"acit7 addition %7 &ore than 1F000 -8 th$* *aAing the national inAe*t&ent o' &ore
than R* 60000 cr6
!;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
roDect 'm1lementation
+ro** a**et %a*e o' the co&"an7 ha* %een enhanced to a%o$t R* 2B;;; cr6 in 200F-06
'ro& 2191 cr6 in 200B-0F )hich i* nearl7 e($al to 1B "ercent increa*e6
,$ring the 7ear 200F-06, 1! ne) "roHect* )orth a%o$t R*6900 cr6, inAolAing ;F00 4kt6
9&*6 o' tran*&i**ion line*, 12 ne) *$%-*tation* and tran*'or&ation ca"acit7 o' &ore than
1000 -<A )ere a""roAed and taken $" 'or i&"le&entation6 3n all, a%o$t B
tran*&i**ion "roHect* co*ting R*6212F cr6 are c$rrentl7 $nder Aario$* *tage* o'
i&"le&entation and &o*t o' the "roHect* are "rogre**ing either ahead o' *ched$le or on
*ched$le6
!9
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
;0
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
;1
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The "ro'it a'ter taG o' the co&"an7 increa*ed %7 nearl7 2; "ercent in the FD 200F-06 a*
co&"ared to FD 200B-0F i6e6 it increa*ed 'ro& !;F6F2 cr6 to 100;69 cr6 4o&"an7 d$ring
the 7ear ha* eGhi%ited a *"ectac$lar gro)th on 'inancial 'ront d$ring 200F-06 achieAing a
t$rnoAer o' R* FFB cr6 and net "ro'it o' R* 1009 cr6 a* co&"are to 2;1 cr6 and !;6 cr6
re*"ectiAel7 d$ring the FD 200B-0F, an increa*e o' &ore than 2F "ercent t$rnoAer and
&ore than 2; "ercent in "ro'it6 To re&ain a 'inanciall7 "rogre**iAe organi?ation in
e&erging &arket condition*, Po)er +rid i* taking all "o**i%le *te"* to i&"roAe it*
'inancial *trength6 Thi* incl$de taking $" o' other kind o' *7nergic %$*ine** Aent$re* *$ch
a* diAer*i'ication in teleco& *ector, con*$ltanc7 a**ign&ent at national and international
leAel in tran*&i**ion, teleco& and di*tri%$tion *ector6 A 'inal diAidend o' R* 0266; cr6
)a* reco&&ended d$ring the FD 200F-066
;2
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Cash Flo! Statement
;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The net ca*h 'lo) 'ro& o"erating actiAitie* ha* increa*ed 'ro& R* 2;96F1cr6 in the FD
200B-0F to R* 6;66;0 cr6 in FD 200F-06 .i6e6 a increa*e o' nearl7 0 "ercent/6 The net
ca*h 'lo) 'ro& 'inancing actiAitie* ha* increa*ed 'ro& 1!612 cr in the 7ear 200B-0F to
901610 cr6 in the 200F-06 )hich *ho)* a h$ge increa*e o' F16 "ercent a* co&"are to the
"reAio$* 7ear6 #i&ilarl7 the net ca*h 'lo) 'ro& inAe*ting actiAitie* ha* decrea*ed %7
aro$nd F162 "ercent6 3ncrea*e in "roceed* 'ro& i**$e o' *hare ca"ital and loan* rai*ed
d$ring the 7ear )ere re*"on*i%le 'or *$ch a h$ge increa*e in the ca*h 'lo) 'ro& 'inancing
actiAitie*6 #i&ilarl7 large a&o$nt o' '$nd* attri%$ted to)ard* "$rcha*e o' 'iGed a**et*
eAer7 7ear )a* &ainl7 re*"on*i%le 'or decrea*e in the a&o$nt o' ca*h 'lo) 'ro& inAe*ting
actiAitie*6
;B
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Anal8sis o/ /inancial statements /or the 8ear 633?-34
Financial ,esults /or the 8ear 633?-34
;F
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Anal8sis o/ Financial Statement /or the 8ear 633?-34
;6
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
;!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Anal8sis o/ Financial Statement For the 8ear 633?-34
The *hare ca"ital o' the co&"an7 increa*ed %7 6 "ercent and the re*erAe and *$r"l$* al*o
*ho)* an increa*e o' 12 "ercent in the 7ear 2006-0! a* co&"ared to the 7ear 200F-06
there%7 increa*ing the total *hareholder* '$nd %7 nearl7 1 "ercent6 #i&ilarl7 %oth the
"ortion o' *ec$red loan* and $n*ec$red loan* ha* al*o increa*ed %7 2F "ercent and 6
"ercent re*"ectiAel7 at the end o' the 7ear 2006 in the total a&o$nt o' loan '$nd* )hich
*ho)* that the co&"an7 i* no) o"ting 'or &ore o' *ec loan a&o$nt 'or '$nding their
Aario$* "roHect*6 The co&"an7 ha* al*o created adAance again*t de"reciation to $" to
R*6120161! cr6 d$ring the 7ear )hich *ho)* a increa*e o' nearl7 B6 "ercent a* co&"ared
to 7ear 200F-066 The 1et 'iGed a**et* o' the co&"an7 ha* al*o increa*ed 'ro& 2B91!610
cr6 to 19106;; cr i6e6 aro$nd 29 "ercent increa*e oAer the "eriod The ca"ital )ork-in-
"rogre** o' the co&"an7 ha* al*o increa*ed %7 !0 "ercent at the end o' the 7ear 200!6
The de%tor* o' the co&"an7 haAe increa*ed %7 aro$nd B9 "ercent %eca$*e o' the increa*e
in the loan* %eing taken %7 the co&"an76 The &i*cellaneo$* eG"endit$re o' the co&"an7
ha* red$ced %7 ; "ercent at the end o' the 7ear 200!6The ca*h and %ank %alance o' the
co&"an7 ha* *ho)n a increa*e o' aro$nd 102 "ercent at the end o' the 7ear 200! a*
co&"ared to 2006 d$ring )hich there )a* decrea*e in the ca*h and %ank %alance6
;;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
roDect im1lementation
,$ring the 7ear 2006-0! Po)er +rid haAe added a%o$t B,B 4kt6 9&6 o' tran*&i**ion
line*, 11 ne) *$%-*tation* and tran*'or&ation ca"acit7 o' F,0B0 -<A6 The*e addition*
haAe hel"ed Po)er +rid in i&"roAing "o)er *$""l7 *it$ation in Aario$* regional grid*
th$* 'acilitating enhanced inter-regional "o)er tran*'er ca"acit7 and relia%ilit7 o' the
*7*te&619 ne) "roHect* )orth a%o$t R* ;900 crore inAolAing 10,2F0 4kt k&* o'
tran*&i**ion line*, ; ne) *$%-*tation* and tran*'or&ation ca"acit7 o' a%o$t F,;F0 -<A,
)ere a""roAed and taken $" 'or i&"le&entation d$ring the 7ear6 A total o' FB
tran*&i**ion "roHect*, co*ting a%o$t R* 0000 crore are $nder i&"le&entation and are
"rogre**ing either ahead o' or on *ched$le a* on the end o' the 7ear 2006-0!6 8ith the
co&&i**ioning o' Aario$* "roHect*, the +ro** A**et* %a*e o' the co&"an7 ha* increa*ed
to a%o$t R* 29,01F crore in 2006-0! 'ro& R* 2B,;;; crore in 200F-06 )hich *ho)* an
increa*e o' &ore than 16 "ercent6

;9
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Fun# mo9iliJation
,$ring the FD 2006-0! '$nd* a&o$nting to R* B02 cr6 )ere reali?e 'ro& do&e*tic
&arket thro$gh "riAate "lace&ent o' %ond* at Aer7 co&"etitiAe rate* 'or &eeting the
ca"ital inAe*t&ent %eing &ade %7 the co&"an76 A"art 'ro& thi* 1et B$dgetar7 #$""ort
o' R* 200 crore )a* al*o receiAed d$ring the 7ear and the %alance re($ire&ent )a* &et
thro$gh the ongoing loan* 'ro& &$ltilateral '$nding agencie* and internal re*o$rce* o'
the co&"an76 3n FD 2006-0! the co&"an7 $ndertook 4a"ital 3nAe*t&ent o' R*66,29 cr6,
an increa*e o' a%o$t 2,21; cr6 .i6e6 FBJ/ co&"ared to R* B,111 cr6 in FD 200F-066 For the
90
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
ne) ca"ital inAe*t&ent the highe*t contri%$ting *o$rce o' '$nd i* Bond* N other* )hich
contri%$te to aro$nd !661 "ercent6 The neGt contri%$ting *o$rce o' '$nd )a* the 'oreign
c$rrenc7 loan* and the re*erAe* o' the co&"an7 )hich contri%$te* to aro$nd 1;6B!
"ercent and 216BF "ercent re*"ectiAel76 2($it7 and 1et c$rrent lia%ilitie* are al*o
i&"ortant *o$rce* o' '$nd* in the FD 2006-0!6 The other *o$rce* o' '$nd* )ere loan*
'ro& Aario$* 'inancial in*tit$tion* and goAern&ent o' 3ndia loan* %$t their "ortion in the
total *o$rce* o' '$nd* )a* onl7 169B "ercent and 61F "ercent re*"ectiAel76 The &ain
a""lication o' '$nd )a* once again attri%$ted to)ard* the "$rcha*e o' 'iGed a**et* i6e6
6F666 "ercent o' the '$nd* )a* $*ed 'or the "$rcha*e o' 'iGed a**et*6 ,$ring the 7ear the
'iGed a**et* o' the co&"an7 increa*ed %7 R* B12! cr6 )hich i* e($al to &ore than 16
"ercent increa*e d$ring the 7ear6 The1; "ercent o' the '$nd )a* $tili?ed 'or the ca"ital-
)ork-in-"rogre** and nearl7 10 "ercent to)ard* increa*e in con*tr$ction *tore* and
adAance*6 There )a* a decrea*e in inAe*t&ent %7 R*61!2 cr6 d$ring the 7ear6 The total
a""lication o' '$nd* to)ard* inAe*t&ent )a* onl7 F692 "ercent in the 7ear 2006-0! a*
again*t !691 "er in 200F-066
'ncome 9rea;-u1
The &aHor *o$rce o' their inco&e once again co&e* 'ro& the Aario$* Tran*&i**ion
charge*, )hich i* nearl7 e($al to ;26F6 "ercent6 The inco&e 'ro& Aario$* con*$ltancie*,
91
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
"roHect &anage&ent and *$"erAi*ion 'ee* haAe *ho)n a increa*e o' 1 "ercent d$ring the
7ear 2006-0! a* co&"ared to 7ear200F-066 F6!B "ercent o' the inco&e )a* receiAed in
the 'or& o' the*e t7"e* o' 'ee* d$ring the 7ear6 The other &aHor *o$rce thro$gh )hich
the7 receiAe their inco&e i* the intere*t inco&e on the #tate goAern&ent %ond* )hich i*
e($al to B6B0 "ercent6 The other *o$rce* o' their inco&e are #hort Ter& 5"en Acce**
inco&e, :ea*e inco&e, teleco& reAen$e and other inco&e* )hich contri%$ted 16B
"ercent, 16B "ercent, 1696 "ercent and 26B; "ercent re*"ectiAel76 Po)er +rid )a* a%le to
reali?e 100 "ercent o' it* c$rrent receiAa%le d$e* d$ring thi* 'inancial 7ear al*o6
5$t*tanding d$e* o' R* 11 crore )a* al*o reali?e* d$ring the 7ear6 ,$e to the co&"an7I*
"er*i*tent e''ort, there ha* %een a""recia%le i&"roAe&ent in :etter o' 4redit .:4/
aAaila%ilit7 at R* 261 crore6
92
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
(1erating results
9
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
'ncome statement
9B
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
9F
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The "ro'it a'ter taG o' the co&"an7 increa*ed %7 nearl7 22 "ercent in the FD 2006-0! a*
co&"ared to FD 200F-06 i6e6 it increa*ed 'ro& 100;69 cr6 to 12296! cr6 4o&"an7 d$ring the
7ear ha* eGhi%ited a *"ectac$lar gro)th on 'inancial 'ront d$ring 2006-0! achieAing a t$rnoAer o'
R* B0;2 cr6 and net "ro'it o' R* 1229 cr6 a* co&"are to FFB cr6 and 1009 cr6 re*"ectiAel7 d$ring
the FD 200F-06, an increa*e o' &ore than 1F "ercent t$rnoAer and &ore than 22 "ercent in "ro'it6
To re&ain a 'inanciall7 "rogre**iAe organi?ation in e&erging &arket condition*, Po)er +rid i*
taking all "o**i%le *te"* to i&"roAe it* 'inancial *trength6 The total inco&e and eG"endit$re o'
the co&"an7 ha* *ho)n a increa*e o' 1F "ercent and 1 "ercent re*"ectiAel76 The &ain ite&* o'
eG"endit$re are 2&"lo7ee* Re&$neration and Bene'it*, Tran*&i**ion eG"en*e*, Ad&ini*tration
eG"en*e*, de'erred reAen$e eG"endit$re, 3ntere*t and 'inance charge*, "roAi*ion*, de"reciation
and Aario$* other eG"en*e*6 5$t o' the total "ro'it a'ter taG aAaila%le 'or a""ro"riation R* 600
crore )a* a""ro"riated to)ard* +eneral Re*erAe, R* !601 crore )a* a""ro"riated to)ard*
Bond* Rede&"tion Re*erAe and
R* 2B660 crore )a* a""ro"riated to)ard* #el' 3n*$rance Re*erAe6
96
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
,atio anal8sis
#o&e i&"ortant ratio* on the 'inancial health and )orking o' the co&"an7 at the end o' la*t t)o
7ear* ending 1
*t
-arch 200F and 1
*t
-arch 2006 are a* $nder:
As on 1--ar-0!
5PB3T@Prod6ca"6e&"l6.J/ 126B;
PB3T@4a"6 2&"lo7ed .J/ 11666
PAT@1et)orth .J/ 10620
TaG@PBT .J/ 11661
Total ,e%t@1et)orth .G/ 16;1
:ong Ter& ,e%t@1et)orth .G/ 16!B
PB,3T@Finance 4harge* .G/ 26!;
4$rrent Ratio .G/ 06!!
R- 3nAentor7 .da7* con*$&"tion/ 0600
F+ inAentor7 .da7* co*t o' *ale*/ 0600
ReceiAa%le* .da7* gro** *ale*/ F621
4reditor* .da7* co*t o' *ale*/ 0600
5"erating c$rrent a**et* .da7* 53/ B0600
1et Pro'it -argin B62F
5"erating Pro'it -argin 96610
Ret$rn on 4a"ital 2&"lo7ed 96F
Ret$rn on 2($it7 116!!
3ntere*t coAer 260
9!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Cash Flo! Statement
9;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The net ca*h 'lo) 'ro& o"erating actiAitie* ha* increa*ed 'ro& R* 6;66;0 cr6 in the FD
200F-06 to R* BFF6F cr6 in FD 2006-0! .i6e6 a increa*e o' nearl7 1; "ercent/6 The net
ca*h 'lo) 'ro& 'inancing actiAitie* ha* increa*ed 'ro& 901610 cr in the 7ear 200F-06 to
299;600 cr6 in the 2006-0! )hich *ho)* a h$ge increa*e o' 22 "ercent a* co&"are to the
"reAio$* 7ear6 #i&ilarl7 the net ca*h 'lo) 'ro& inAe*ting actiAitie* ha* decrea*ed %7
aro$nd B662 "ercent6 :arge a&o$nt o' '$nd* attri%$ted to)ard* "$rcha*e o' 'iGed a**et*
eAer7 7ear )a* &ainl7 re*"on*i%le 'or decrea*e in the a&o$nt o' ca*h 'lo) 'ro& inAe*ting
actiAitie*6
er/ormance #uring the 53
th
/ive 8ear 1lan
99
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The 'inancial 7ear 2006-0! )a* the la*t 7ear o' 10
th
"lan6 The co&"an7I* "er'or&ance
d$ring the 10
th
"lan "eriod had %een o$t*tanding a* again*t the "reAio$* "lan6 ,$ring the
10
th
"lan the co&"an7 added 2F,12! -<A o' tran*'or&ation ca"acit7 and 6 *$%-*tation*
at R* 1;,;6F crore6 The co&"ara%le 'ig$re 'or the ninth "lan .199!-2002/ had %een
10,9F! crore -<A o' tran*'or&ation ca"acit7 and 1B *$%-*tation* at R* ;,F2 crore and
the co&"ari*on clearl7 *ho)* that there i* "ercent increa*e in ca"acit7 d$ring the 10
th
"lan "eriod6 The inter-regional "o)er tran*'er ca"acit7 ha* al*o increa*ed 'ro& F,000
-8 at the end o' the ninth "lan to 1B,100 -8 at the end o' the 10
th
"lan6 The inter-
regional "o)er eGchange al*o increa*ed 'o$r ti&e* i6e6 'ro& !,90 -0* d$ring the ninth
"lan to 1;,!29 -0* at the end o' the 10
th
"lan "eriod there%7 contri%$ting to national
*aAing6 A* again*t F; grid di*t$r%ance in the ninth "lan "eriod there )a* onl7 B grid
di*t$r%ance d$ring the 10
th
"lan "eriod6 The*e all B grid di*t$r%ance ha""ened in the 1
*t
7ear o' the 10
th
"lan "eriod and a'ter that there ha* not %een a *ingle &aHor or &inor grid
di*t$r%ance d$ring the re*t "eriod6 Thi* achieAe&ent o' the co&"an7 ha* &ade
tre&endo$* ne)* in "o)er *ector circle* acro** the glo%e6
100
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The co&"an7 ha* "lanned ca"ital eG"endit$re o' R* FF,000 crore, o$t o' R* !F,000 crore
needed 'or 4entral Tran*&i**ion #7*te& d$ring the 11
th
"lan6 Thi* a&o$nt *hall %e rai*ed
thro$gh it* o)n internal re*o$rce*, national and international %orro)ing* incl$ding
rai*ing do&e*tic %ond* and the re&aining 20,000 crore )ill %e &o%ili?ed thro$gh "riAate
*ector in the 'or& o' Hoint Aent$re* )ith Po)er +rid6 2Gten*iAe "lanning i* %eing carried
o$t to i&"le&ent *tate-o'-the-art technologie* like 1200 9< A4 Tran*&i**ion #7*te&,
High #$rge 3&"edance :oading, :arge #cale A$to&ation o' #$%-*tation*, 0*e o'
Helico"ter* in con*tr$ction N &aintenance etc6
The Aie)* eG"re**ed %7 the #tanding 4o&&ittee on 2nerg7 on the "er'or&ance o' Po)er
+rid are a* 'ollo)*:
=The co&&ittee noted that o$t o' 10
th
Plan o$tla7 o' R* 21,!0 crore, Po)er +rid co$ld
*"end onl7 1;,1;1 crore6 Ho)eAer )ith thi* le**er o$tla7, the "h7*ical achieAe&ent* haAe
%een &ore than the 10
th
"lan target*6 The 4o&&ittee a""reciated the )ork done %7 Po)er
+rid in the 'ield o' tran*&i**ion o' "o)er6
The ke7 'inancial "ara&eter* )hich haAe )itne**ed a ($ant$& H$&" d$ring the 10
th
'iAe
7ear "lan are indicated %elo):
101
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Strengthening $ational "ri#
The 'o$r regional grid* o' Po)er +rid i6e6 1orthern, 8e*tern, 2a*tern and 1orthea*tern
are no) o"erating a* one *7nchrono$* grid coAering a di*tance o' nearl7 2;00 k&6 The
total in*talled ca"acit7 o' thi* *7nchrono$* grid i* a%o$t 90000 -8, )hich i* a&ong*t
the )orldI* large*t grid*6 A* o' -arch 1, 200! the total inter-regional "o)er
102
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
tran*&i**ion ca"acit7 o' the national grid ha* no) %een enhanced to 1B,100 -8 )hich
%7 the 7ear 2012 )ill reach !6000 -86 Thi* ha* 'acilitated the eGchange o' "o)er 'ro&
*$r"l$* to de'icit region* and ha* al*o ena%led o"en acce** and trading and deAelo"&ent
o' a co&"etitiAe electricit7 &arket6 3n 2006-0! ;,000 -0* o' inter-regional energ7
tran*'er )a* 'acilitated o$t o' )hich 1;,000 -0* haAe %een tran*acted thro$gh *hort-
ter& o"en acce** and $n*ched$led interchange* )hich led to a *aAing o' a%o$t 000
crore6
Facilitating rivate artici1ation
The 7ear 2006-0! ha* al*o )itne**ed the *$cce**'$l co&&i**ioning o' 'ir*t "$%lic-"riAate
Eoint <ent$re "roHect %et)een Po)er +rid and Tata Po)er, na&el7 Tala Tran*&i**ion
#7*te&6 ,$e to thi* Po)er +rid ha* %eco&e the onl7 "o)er *ector $tilit7 that ha* %een
*$cce**'$l in 'acilitating "riAate inAe*t&ent in tran*&i**ion6 The Aie)* eG"re**ed %7
8orld Bank )ho ha* "artl7 '$nded thi* "roHect are a* 'ollo)* =Thi* i* a land&ark
tran*action 'or 3ndia and )e %elieAe thi* the 'ir*t Hoint Aent$re tran*&i**ion "roHect in a
deAelo"ing co$ntr7 in A*ia6 The "roHect i* an eGcellent eGa&"le o' "$%lic-"riAate
"artner*hi" and ha* great "otential to %e re"licated in order to attract "riAate inAe*t&ent
into in'ra*tr$ct$re6
Diversi/8ing ro/ita9ilit8
10
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Po)er +ridI* diAer*i'ication into teleco&&$nication, a *7nergic %$*ine**, i* al*o
"rogre**ing *ati*'actoril76 ,$ring the 7ear 2006-0! the co&"an7 earned reAen$e o' a%o$t
R* !; crore 'ro& the teleco&&$nication %$*ine** )hich i* eG"ected to go $"to R* 12F
crore or &ore in the 7ear 200!-0;6
,$e to thi* %ig achieAe&ent the co&"an7 i* thinking to '$rther enlarge it* hori?on in the
area* o' entertain&ent and door-to-door *erAice*6
'ncome /rom Consultanc8
Po)er +rid * al)a7* tr7ing to eG"lore and ta" all "o**i%le and eAen $nconAentional
reAen$e *o$rce*6 ReAen$e 'ro& con*$ltanc7 %$*ine** i* a&ong one o' the*e *o$rce*6 3n
2006-0! al*o Po)er +rid had &ade ne) 'ora7* in the con*$ltanc7 %$*ine**6 The
con*$ltanc7 'or con*tr$ction o' tran*&i**ion line a**ociated )ith -@*6 51+4 Tri"$ra
Po)er 4or"oration PriAate :i&ited at a con*$ltanc7 'ee o' R*6 120 crore i* a&ong one o'
the "ri?ed a**ign&ent o' the 7ear6 The oAerall con*$ltanc7 reAen$e had gro)n aro$nd 2;
"ercent d$ring the 7ear 2006-0!6
10B
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Iualit8 Management
Po)er +rid i* the 'ir*t "o)er $tilit7 in 3ndia to %e certi'ied )ith 3ntegrated -anage&ent
#7*te& co&"ri*ing:
3#5: 9001 'or ($alit7 &anage&ent,
3#5: 1B001 'or 2nAiron&ent -anage&ent and
3#5: 1;001 'or 5cc$"ational Health and #a'et76
,$ring the 7ear 2006-0! it al*o achieAed the di*tinction o' %eing the 'ir*t "o)er $tilit7 N
*econd co&"an7 in the )orld to get certi'ied )ith PA# 99:2006 integrating the
re($ire&ent o' 3#5 9001:2000, 3#51B001:200B and 5H#A# 1;001:19996 Thi*
certi'ication )a* accredited %7 B#3 a'ter the eGten*iAe a$dit o' it* 3ntegrated -anage&ent
#7*te&6
,e1ort on Cor1orate "overnance
4or"orate goAernance i* a%o$t "ro&oting cor"orate 'airne**, tran*"arenc7 and
acco$nta%ilit7 in the %e*t intere*t o' the Aario$* *takeholder* in the co&"an76 3t i* a
*7*te& %7 )hich %$*ine** cor"oration* are directed and controlled6 Po)er +rid %elieAe*
that good goAernance *ho$ld entail tr$*tee*hi", e&"o)er&ent and acco$nta%ilit7 o' the
&anage&ent )hile re&aining "roactiAe to the +oAern&ent "olicie*6 Po)er +ridI*
cor"orate goAernance "roce** i* 'oc$*ed to)ard* it* &i**ion o' =e*ta%li*h&ent and
o"eration o' Regional and 1ational Po)er +rid* to 'acilitate tran*'er o' "o)er )ithin and
acro** the region* )ith Relia%ilit7, #ec$rit7 and 2cono&7 on *o$nd co&&ercial
"rinci"le*> %a*ed on the )ell e*ta%li*hed "ractice* in engineering and de*ign, contract*,
"roHect &anage&ent, 'inance etc6 )hich are %eing 'ollo)ed in letter and *"irit and are
%eing contin$all7 i&"roAed $"on6
10F
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The 4or"orate +oAernance o' Po)er +rid i* geared %7 the 'ollo)ing:
To &eet the *hort ter&, &edi$& ter&, and long ter& o%HectiAe* and *"eci'ic
target* eAer7 7ear *et %7 the +oAern&ent o' 3ndia and the "er*on at the hel& o'
a''air* i6e6 the Board, %7 e&"o)ering "eo"le at the &o*t a""ro"riate leAel*
kee"ing the Ho% "ro'ile in Aie)6
To re*"ond to the challenge* and the e&erging o""ort$nitie* and to "la7 a "iAotal
role in the econo&ic deAelo"&ent o' the co$ntr76
:i*t o' &aHor 3ndian "o)er *ector "la7er*
1ational Ther&al Po)er 4or"oration .1TP4/
1ational H7dro 2lectric 4or"oration .1H24/
Po)er Finance 4or"oration o' 3ndia .PF43/
Po)er +rid 4or"oration o' 3ndia :td .Po)er +rid 3ndia/
Po)er Trading 4or"oration .PT4/
B$rea$ o' 2nerg7 2''icienc7 .B22/
106
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
C(MA,'S($ (F "C'% +'). $)C
C(MA,'S($ (F "C'% +'). $)C
$ational )hermal o!er Cor1oration ($)C)
1TP4 :i&ited i* the large*t "o)er generating co&"an7 o' 3ndia6 A "$%lic *ector co&"an7, it
)a* incor"orated in the 7ear 19!F to accelerate "o)er deAelo"&ent in the co$ntr7 a* a )holl7
o)ned co&"an7 o' the +oAern&ent o' 3ndia6 At "re*ent, +oAern&ent o' 3ndia hold* ;96FJ o'
the total e($it7 *hare* o' the co&"an7 and the %alance 106FJ i* held %7 F33*, ,o&e*tic Bank*,
P$%lic and other*6 8ithin a *"an o' 2 7ear*, 1TP4 ha* e&erged a* a tr$l7 national "o)er
co&"an7, )ith "o)er generating 'acilitie* in all the &aHor region* o' the co$ntr76
1TP4O* core %$*ine** i* engineering, con*tr$ction and o"eration o' "o)er generating
"lant*6 3t al*o "roAide* con*$ltanc7 in the area o' "o)er "lant con*tr$ction* and "o)er
generation to co&"anie* in 3ndia and a%road6 A* on date the in*talled ca"acit7 o' 1TP4
10!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
i* 29,1BB -8 thro$gh it* 1F coal %a*ed .2,9F -8/, ! ga* %a*ed .,9FF -8/ and B
Eoint <ent$re ProHect* .1,!9B -8/6 1TP4 ac($ired F0J e($it7 o' the #A3: Po)er
#$""l7 4or"oration :td6 .#P#4:/6 Thi* E< co&"an7 o"erate* the ca"tiAe "o)er "lant* o'
,$rga"$r .120 -8/, Ro$rkela .120 -8/ and Bhilai .!B -8/6 1TP4 al*o ha* 2;6J
*take in Ratnagiri +a* N Po)er PriAate :i&ited .R+PP:/ a Hoint Aent$re co&"an7
%et)een 1TP4, +A3:, 3ndian Financial 3n*tit$tion* and -ahara*htra #2B Holding 4o6
:td6 The "re*ent ca"acit7 o' R+PP: i* 1B;0 -86
1TP4O* *hare on 1 -ar 200; in the total in*talled ca"acit7 o' the co$ntr7 )a* 1961J and it
contri%$ted 2;6F0J o' the total "o)er generation o' the co$ntr7 d$ring 200!-0;6
1TP4 ha* *et ne) %ench&ark* 'or the "o)er ind$*tr7 %oth in the area o' "o)er "lant
con*tr$ction and o"eration*6 3t i* "roAiding "o)er at the chea"e*t aAerage tari'' in the
co$ntr76 8ith it* eG"erience and eG"erti*e in the "o)er *ector, 1TP4 i* eGtending
con*$ltanc7 *erAice* to Aario$* organi*ation* in the "o)er %$*ine**6
1TP4 i* co&&itted to the enAiron&ent, generating "o)er at &ini&al enAiron&ental co*t
and "re*erAing the ecolog7 in the Aicinit7 o' the "lant*6 1TP4 ha* $ndertaken &a**iAe
a''ore*tation in the Aicinit7 o' it* "lant*6 Plantation* haAe increa*ed 'ore*t area and
red$ced %arren land6 The &a**iAe a''ore*tation %7 1TP4 in and aro$nd it* Ra&ag$nda&
Po)er *tation .2600 -8/ haAe contri%$ted red$cing the te&"erat$re in the area* %7
10;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
a%o$t Wc6 1TP4 ha* al*o taken "roactiAe *te"* 'or a*h $tili*ation6 3n 1991, it *et $" A*h
0tili*ation ,iAi*ion to &anage e''icient $*e o' the a*h "rod$ced at it* coal *tation*6 A
Q4entre 'or Po)er 2''icienc7 and 2nAiron&ent Protection .421P22P/Q ha* %een
e*ta%li*hed in 1TP4 )ith the a**i*tance o' 0nited #tate* Agenc7 'or 3nternational
,eAelo"&ent6 .0#A3,/6 4en"ee" i* an e''icienc7 oriented, eco-'riendl7 and eco-
n$rt$ring initiatiAe - a *7&%ol o' 1TP4O* concern to)ard* enAiron&ental "rotection and
contin$ed co&&it&ent to *$*taina%le "o)er deAelo"&ent in 3ndia6
A* a re*"on*i%le cor"orate citi?en, 1TP4 i* &aking con*tant e''ort* to i&"roAe the *ocio-
econo&ic *tat$* o' the "eo"le a''ected %7 the it* "roHect*6 Thro$gh itO* Reha%ilitation and
Re*ettle&ent "rogra&&e*, the co&"an7 endeaAor* to i&"roAe the oAerall *ocio-
econo&ic *tat$* o' ProHect A''ected Per*on*6
1TP4 )a* a&ong the 'ir*t P$%lic #ector 2nter"ri*e* to enter into a -e&orand$& o'
0nder*tanding .-50/ )ith the +oAern&ent in 19;!-;;6 1TP4 ha* %een Placed $nder
the O2Gcellent categor7O .the %e*t categor7/ eAer7 7ear *ince the -50 *7*te& %eca&e
o"eratiAe6
Recogni?ing it* eGcellent "er'or&ance and Aa*t "otential, +oAern&ent o' the 3ndia ha*
identi'ied 1TP4 a* one o' the He)el* o' P$%lic #ector O1aAratna*O- a "otential glo%al
giant6
Vision
To deliver quality power to the Nation by creating models of excellence and
benchmarks in electricity distribution thereby achieving customer delight.
Mission
109
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
To create a role &odel in the electricit7 di*tri%$tion %$*ine** %7 *etting ne)
%ench&ark*
To "roAide tran*"arent, ethical and "ro&"t *erAice* 'or enhancing c$*to&er
delight6
To ado"t creatiAe and innoAatiAe techni($e* 'or de&and-*ide &anage&ent and
'inancial Aia%ilit7 o' the di*tri%$tion %$*ine**e*6
To *"eedil7 "lan and i&"le&ent di*tri%$tion net)ork* $*ing *tate-o'-the-art
technologie*6
To "roAide relia%le, $ninterr$"ted and ($alit7 "o)er at a""ro"riate tari''*6
To achieAe e''ectiAe energ7 acco$nting %7 en*$ring acc$rate &etering, ti&el7
%illing and collection o' reAen$e*6
To create co&"etent and co&&itted h$&an re*o$rce %7 n$rt$ring technological N
co&&ercial co&"etence 'or organi*ational gro)th and eGcellence
1e) %$*ine** deAelo"&ent
1TP4, )ith a rich eG"erience o' engineering, con*tr$cting and o"erating oAer 26,000
-8 o' ther&al generating ca"acit7, i* the large*t and one o' the &o*t e''icient "o)er
co&"anie* in 3ndia, haAing o"eration* that &atch the glo%al *tandard*6
1TP4 ha* identi'ied Eoint <ent$re*, *trategic alliance* a* )ell a* ac($i*ition* and
diAer*i'ication* a* Aia%le and de*ired o"tion* 'or it* %$*ine** deAelo"&ent6
1TP4 look* 'or o""ort$nit7 to create *$ch Hoint Aent$re* and *trategic alliance*, in the
entire Aal$e chain o' the "o)er %$*ine**6 1TP4 a* a "artner endo)* the Eoint <ent$re
Alliance* )ith a )inning edge6 Ac($i*ition* and ,iAer*i'ication* in the area* related to
the core %$*ine** not onl7 en*$re gro)th %$t al*o add to the ro%$*tne** o' the co&"an76
,iAer*i'ication i* carried o$t either directl7 or thro$gh *$%*idiarie*@E<*6
110
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
111
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
+ro)th "lan*
5Aer the la*t three decade*, 1TP4 ha* *"earheaded deAelo"&ent o' ther&al "o)er
generation in the 3ndian "o)er *ector6 3n thi* "roce**, it ha* %$ilt a *trong "ort'olio o'
coal and ga*@li($id '$el %a*ed generation ca"acitie*6 The co&"an7 ha* &ade initial 'ora7*
in the area o' h7dro"o)er deAelo"&ent and "lan* to haAe a *igni'icant *hare o' h7dro
"o)er in it* '$t$re generation "ort'olio6 Altho$gh 1TP4 i* al*o o''ering technical
*erAice*, %oth in do&e*tic and international &arket*, thro$gh it* 4on*$ltanc7 8ing, the
generation %$*ine** )o$ld contin$e to %e the *ingle large*t reAen$e generator 'or 1TP46
The 3ndian "o)er *ector i* )itne**ing *eAeral change* in the %$*ine** and reg$lator7
enAiron&ent6 The legal and "olic7 'ra&e)ork ha* changed *$%*tantiall7 )ith the
enact&ent o' the 2lectricit7 Act 2006 3n the 'ore*eea%le '$t$re, 3ndia 'ace* 'or&ida%le
challenge* in &eeting it* energ7 need*6 Recentl7, a dra't integrated energ7 "olic7 ha*
%een i**$ed, )hich addre**e* all a*"ect* incl$ding energ7 *ec$rit7, acce**, aAaila%ilit7,
a''orda%ilit7, "ricing, e''icienc7 and enAiron&ent6 To &eet the t)in o%HectiAe* o'
en*$ring aAaila%ilit7 o' electricit7 to con*$&er* at co&"etitiAe rate*, a* )ell a* attract
large "riAate inAe*t&ent* in the *ector, a ne) Tari'' "olic7 ha* al*o %een i**$ed6 The
"o)er *ector th$* o''er* a &iGed %ag o' challenge* and o""ort$nitie* to "la7er* and
1TP4 )o$ld contin$e to reAie) it* %$*ine** *trateg7 and "ort'olio in light o' the*e
change*6
+ro)th o' the +eneration B$*ine**
,eAelo"ing and o"erating )orld-cla** "o)er *tation* i* 1TP4I* core co&"etence6 3t*
*cale o' o"eration, 'inancial *trength and large eG"erience *erAe to "roAide an adAantage
oAer co&"etitor*6 To &eet the o%HectiAe o' &aking aAaila%le relia%le and ($alit7 "o)er at
co&"etitiAe "rice*, 1TP4 )o$ld contin$e to *"eedil7 i&"le&ent "roHect* and introd$ce
*tate-o'-art technologie*6
112
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Total ca"acit7 "ort'olio
3ndiaI* generation ca"acit7 can %e eG"ected to gro) 'ro& the c$rrent leAel* o' a%o$t 120
+8 to a%o$t 22F-2F0 +8 %7 201!6 1TP4 c$rrentl7 acco$nt* 'or a%o$t 20J o' the
co$ntr7I* in*talled ca"acit7 and al&o*t 60J o' the total in*talled ca"acit7 in the 4entral
*ector in the co$ntr76 +oing 'or)ard, in it* target to re&ain the large*t generating $tilit7
o' 3ndia, 1TP4 )o$ld endeaAo$r to &aintain or i&"roAe it* *hare o' 3ndiaI* generating
ca"acit76 To)ard* thi* end, 1TP4 )o$ld target to %$ild an oAerall ca"acit7 "ort'olio o'
oAer 66,000 -8 %7 201!6
,iAer*i'ication along the <al$e 4hain
1TP4 ha* achieAed the di*tinction o' %eing the large*t ther&al generating co&"an7 in
3ndia6 3n the "a*t, thi* 'oc$* )a* ade($ate a* the ind$*tr7 )a* highl7 reg$lated )ith
li&ited diAer*i'ication o""ort$nitie*6 5Aer la*t 'e) 7ear*, the co$ntr7 ha* %een 'acing
ac$te *hortage*, %oth in coal and ga*, *eAerel7 a''ecting o"ti&$& $tili*ation o' it* "o)er
*tation* and the*e *hortage* are likel7 to contin$e in '$t$re a* )ell6 Thi* i* in *"ite o' the
'act that 3ndia i* one o' the large*t "rod$cer* o' coal in the 8orld6 To *a'eg$ard it*
co&"etitiAe adAantage in "o)er generation %$*ine**, 1TP4 ha* &oAed ahead in
diAer*i'7ing it* "ort'olio to e&erge a* an integrated "o)er &aHor, )ith "re*ence acro**
entire energ7 Aal$e chain6 3n 'act, to *7&%oli*e thi* change, 1TP4 ha* taken on a ne)
identit7 and a ne) na&e =1TP4 :i&ited>6 1TP4 ha* recentl7 diAer*i'ied into coal
&ining %$*ine** "ri&aril7 to *ec$re it* '$el re($ire&ent* and *$""ort it* aggre**iAe
ca"acit7 addition "rogra&6 3n addition, 1TP4 i* al*o giAing thr$*t on diAer*i'ication in
the area* o' "o)er trading and di*tri%$tion6 ,iAer*i'ication )o$ld al*o allo) 1TP4 to
o''er ne) gro)th o""ort$nitie* to it* e&"lo7ee* )hile leAeraging their *kill* to ca"itali*e
on ne) o""ort$nitie* in the *ector6
11
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
2*ta%li*hing a +lo%al Pre*ence
To %eco&e a tr$l7 glo%al co&"an7 *erAing glo%al &arket*, it i* e**ential 'or 1TP4 to
e*ta%li*h it* %rand e($it7 in oAer*ea* &arket*6 1TP4 )o$ld contin$e to 'oc$* on o''ering
2ngineering N ProHect -anage&ent #erAice*, 5"eration* N -aintenance *erAice*, and
RenoAation N -oderni?ation *erAice* in the international &arket6
2*ta%li*hing a *$cce**'$l *erAice* %rand )o$ld %e a "rec$r*or to taking higher inAe*t&ent
deci*ion* in di''erent &arket*6 +oing 'or)ard, 1TP4 )o$ld contin$e to eAal$ate Aario$*
o"tion* 'or *trengthening it* "re*ence in glo%al &arket* incl$ding *etting $" "o)er
generation ca"acit7, ac($i*ition o' ga* %lock* etc6
B7 the 7ear 201!, 1TP4 )o$ld haAe *$cce**'$ll7 diAer*i'ied it* generation &iG,
diAer*i'ied acro** the "o)er Aal$e chain and entered oAer*ea* &arket*6 A* a re*$lt 1TP4
)o$ld haAe altered it* "ro'ile *igni'icantl76 2le&ent* o' the reAi*ed "ro'ile that 1TP4
)o$ld *eek to achieAe are:
A&ong*t to" 'iAe &arket ca"itali*ation in the 3ndian &arket
An 3ndian -14 )ith "re*ence in &an7 co$ntrie*
,iAer*i'ied $tilit7 )ith &$lti"le %$*ine**e*
#etting %ench&ark* in "roHect con*tr$ction and "lant aAaila%ilit7 N e''icienc7
Pre'erred e&"lo7er
HaAe a *trong re*earch and technolog7 %a*e
:o7al c$*to&er %a*e in %oth %$lk and retail *$""l7
A leading cor"orate citi?en )ith a keen 'oc$* on eGec$ting it* *ocial re*"on*i%ilit7
11B
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
#erAice* o''ered %7 1TP4
An entire ga&$t o' *erAice* i* o''ered in the area* &entioned a%oAe6 The*e are :
5)nerO* 2ngineer #erAice*
:enderO* 2ngineer #erAice*
2nAiron&ent 2ngineering and -anage&ent
Proc$re&ent #erAice*
ProHect -anage&ent
S$alit7 A**$rance and 3n*"ection #erAice*
-aterial* -anage&ent
4on*tr$ction -anage&ent, 2rection and 4o&&i**ioning
Financial #7*te&* and -odeling
5"eration and -aintenance
Re*toration, 2''icienc7 3&"roAe&ent and RenoAation and -oderni?ation
HR, and Training
Re*earch and ,eAelo"&ent
3n'or&ation Technolog7
-anage&ent 4on*$ltanc7
11F
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Recent 1e)* a%o$t 1TP4
$)C 9ags K"(%D*$ *AC(CK A+A,DSK /or (CC2A)'($A% .*A%).
& SAF*)&
1TP4 :i&ited ha* %een giAen O+olden Peacock A)ard 'or 5cc$"ational Health N
#a'et7-200;O a* on E$ne 6, 200; %7 the a)ard H$r7 con*tit$ted %7 +olden Peacock
A)ard* #ecretariat, 3n*tit$te o' ,irector*, $nder the 4hair&an*hi" o' E$*tice P 1
Bhag)ati, 'or&er 4hie' E$*tice o' 3ndia and -e&%er, 01 H$&an Right* 4o&&i**ion6
The a)ard )a* "re*ented d$ring the +lo%al 4onAention on 4li&ate 4hange at # -
4onAention 4entre, Pala&"$r .Hi&achal Prade*h/6 The a)ard )a* receiAed %7 #hri E6
-oha"atra, 2, .RNR, #a'et7 and 4#R/, 1TP46
$)C Sale o/ energ8 u1 98 5:.?4L an# ro/it u1 98 A.35L
1TP4 :i&ited ha* anno$nced re*$lt* 'or the 'o$rth ($arter ended -arch 200; on 29
th

-a7, 200;6 The *ale o' energ7 'or 'o$rth ($arter i* $" %7 2169J6
The 4o&"an7 ha* declared a$dited 1et #ale* o' R* !,0F0 crore* d$ring 200!-0; a*
again*t R*6 2,F9F crore* regi*tering an increa*e o' 166!J6 The +ro** ReAen$e cro**e*
R*6 B0,000 crore* d$ring 200!-0; regi*tering an increa*e o' 1611J6
Pro'it a'ter taG 'or the 7ear 200!-0; i* R*6 !,B1F crore* a* co&"ared to R*6 6,;6F crore*
d$ring the 7ear 2006-0!, an increa*e o' ;601J oAer "reAio$* 7ear6 AdH$*ted a$dited "ro'it
a'ter taG i* R*6 !,F69 crore* a* again*t adH$*ted a$dited "ro'it o' R*6 6,F62 core* 'or 2006-
0!, an increa*e o' 1F6FJ a'ter "roAiding 'or incentiAe and kee"ing "roAi*ion 'or )age
reAi*ion and other* .one o'' ite&*/6
116
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
C(MA,'S($ (F "C'% +'). ,*%'A$C*
C(MA,'S($ (F "C'% +'). ,*%'A$C*
Reliance 2nerg7, a ke7 con*tit$ent o' the Reliance - Anil ,hir$%hai A&%ani +ro$",
3ndiaO* third large*t %$*ine** ho$*e, i* 3ndiaO* 'ore&o*t "riAate *ector $tilit7 )ith
aggregate gro$" reAen$e* o' R*6 1,01! crore .0#T %illion/ and total a**et* o' R*6
12,166 crore .0#T 26;0 %illion/6 Reliance 2nerg7 engaged in the generation, tran*&i**ion
and di*tri%$tion o' electricit7
Reliance 2nerg7 co&"anie* di*tri%$te &ore than 2; %illion $nit* o' electricit7 to coAer 2F
&illion con*$&er* acro** di''erent "art* o' the co$ntr7 incl$ding -$&%ai and ,elhi in an
area that *"an* oAer 1,2B,00 *(6 k&*6 3t generate* 9B1 -8 o' electricit7, thro$gh it*
"o)er *tation* located in -ahara*htra, Andhra Prade*h, 9erala, 9arnataka and +oa6
Reliance 2nerg7 ha* e&erged a* one o' the leading "la7er* in 3ndia in the 2ngineering,
Proc$re&ent and 4on*tr$ction .2P4/ *eg&ent o' the "o)er *ector6
Reliance 2nerg7 co&"anie* c$rrentl7 "$r*$e *eAeral ga*, coal, )ind and h7dro-%a*ed
"o)er generation "roHect* in -ahara*htra, 0ttar Prade*h, Ar$nachal Prade*h and
0ttaranchal )ith aggregate ca"acit7 o' oAer 1,F10 -86 The*e "roHect* are at Aario$*
*tage* o' deAelo"&ent6 3t i* al*o actiAe in the trading and tran*&i**ion o' "o)er, &aking
it a '$ll7 integrated "la7er in the "o)er *ector6
Reliance 2nerg7 ha* al*o 'ora7ed a* an e($it7 inAe*tor in to the in'ra*tr$ct$re %$*ine**,
incl$ding in the "re*tigio$* -$&%ai &etro rail "roHect and Aario$* road "roHect* o' the
1ational High)a7* A$thorit7 o' 3ndia6 R2: i* co&&itted to creating *$"erior Aal$e 'or
all it* *takeholder* and %e a&ong*t the &o*t ad&ired and tr$*ted $tilit7 co&"anie* in the
11!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
)orld %7 *etting ne) %ench&ark* in *tandard* o' cor"orate goAernance, o"erational and
'inancial eGcellence, re*"on*i%le cor"orate citi?en*hi" and "ro'ita%le gro)th6
-ision
To %e a&ong*t the &o*t ad&ired and &o*t tr$*ted integrated $tilit7 co&"anie* in the
)orld, deliAering relia%le and ($alit7 "rod$ct* and *erAice* to all c$*to&er* at
co&"etitiAe co*t*, )ith international *tandard* o' c$*to&er care there%7 creating
*$"erior Aal$e 'or all *takeholder*6
To *et ne) %ench&ark* in *tandard* o' cor"orate "er'or&ance and goAernance thro$gh
the "$r*$it o' o"erational and 'inancial eGcellence, re*"on*i%le citi?en*hi" and "ro'ita%le
gro)th6
Mission = *Ecellence in *nerg8
To attain glo%al %e*t "ractice* and %eco&e a )orld-cla** $tilit76
To "roAide $ninterr$"ted, a''orda%le, ($alit7, relia%le and clean "o)er to &illion*
o' c$*to&er*6
To achieAe eGcellence in *erAice, ($alit7, relia%ilit7, *a'et7 and c$*to&er care6
To earn the tr$*t and con'idence o' all c$*to&er* and *takeholder* and %7
eGceeding their eG"ectation*, &ake the co&"an7 a re*"ected ho$*ehold na&e6
To )ork )ith Aigo$r,dedication and innoAation,)ith total c$*to&er *ati*'action a*
the $lti&ate goal6
To con*i*tentl7 achieAe high gro)th )ith the highe*t leAel* o' "rod$ctiAit76
To %e a technolog7 driAen, e''icient and 'inanciall7 *o$nd organi?ation6
11;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
To %e a re*"on*i%le cor"orate citi?en, n$rt$ring h$&an Aal$e* and concern 'or
*ociet7, the enAiron&ent and a%oAe all, "eo"le6
To contri%$te to)ard* co&&$nit7 deAelo"&ent and nation %$ilding6
To "ro&ote a )ork c$lt$re that 'o*ter* indiAid$al gro)th, tea& *"irit and
creatiAit7 to oAerco&e challenge* and attain goal*6
To enco$rage idea*, talent and Aal$e *7*te&*6
To $"hold the g$iding "rinci"le* o' tr$*t, integrit7 and tran*"arenc7 in all a*"ect*
o' interaction* and dealing*6
,eliance *nerg8 %t#.= *nergiJing the o!er Sector.
Reliance 2nerg7 :i&ited, incor"orated in 1929, i* a '$ll7 integrated $tilit7 engaged in the
generation, tran*&i**ion and di*tri%$tion o' electricit76 3t rank* a&ong 3ndiaI* to" li*ted
"riAate co&"anie* on all &aHor 'inancial "ara&eter*, incl$ding a**et*, *ale*, "ro'it* and
&arket ca"itali?ation6
A con*tit$ent o' the Reliance Anil ,hir$%hai A&%ani +ro$", Reliance 2nerg7 i* 3ndia
I* 'ore&o*t "riAate *ector $tilit7 )ith aggregate e*ti&ated reAen$e* o' R* 9,F00 crore
.0#T261 %illion/and total a**et* o' R* 10,!00 crore .0#T26B %illion/6 Reliance 2nerg7
di*tri%$te* &ore than 21 %illion $nit* o' electricit7 to oAer 2F &illion con*$&er* in
-$&%ai, ,elhi, 5ri**a and +oa, acro** an area that *"an* 1,2B,00 *(6k&*6 3t generate*
9B1 -8 o' electricit7, thro$gh it* "o)er *tation* located in -ahara*htra, Andhra
Prade*h, 9erala, 9arnataka and +oa6
Reliance 2nerg7 i* c$rrentl7 "$r*$ing *eAeral ga*, coal, )ind and h7dro-%a*ed "o)er
generation "roHect* in -ahara*htra, 0ttar Prade*h, Ar$nachal Prade*h and 0ttaranchal
119
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
)ith aggregate ca"acit7 o' oAer 12,F00 -86 The*e "roHect* are at Aario$* *tage* o'
deAelo"&ent6
Reliance 2nerg7 i* Aigoro$*l7 "artici"ating in e&erging o""ort$nitie* in the area* o'
trading and tran*&i**ion o' "o)er6 3t i* al*o engaged in a "ort'olio o' *erAice* in the
"o)er *ector in 2ngineering, Proc$re&ent and 4on*tr$ction .2P4/thro$gh a net)ork o'
regional o''ice* in 3ndia6
$e! 1aragra1h
The Reliance 2nerg7 :tdI* 3n'ra*tr$ct$re and #erAice* ha* eG"erti*e in all area* 'ro&
Po)er +eneration to ,i*tri%$tion and $ndertake* Aal$e added 4on*$lting and 3n*tallation
o' "o)er "roHect*6
"eneration
The "o)er generation "lant* incl$de:
2G2F0 -8 &$lti-'$el %a*ed ther&al "o)er *tation at ,ahan$ near -$&%ai6
16F -8 co&%ined c7cle "o)er *tation at 9ochi, in 9erala6
220 -8 co&%ined c7cle "o)er "lant at #a&alkot in Andhra Prade*h6
!6F9 -8 )ind 'ar& "roHect at Eogi&atti in the di*trict o' 4hitrad$rga in
9arnataka6
The total 3n*talled ca"acit7 o' the generating $nit* i* ;926F9 -86
)ransmission
4o&"an7 ha* 2G220 9< do$%le circ$it tran*&i**ion line o' 10F k& and 2F k& o' &$lti
circ$it tran*&i**ion line*6 R2: $*e* 4A,@4A- technolog7 to deAelo" riAer N rail)a7
%ridge*, "o)er line cro**ing etc6 The 4o&"an7 ha* *tate-o'-the-art tran*&i**ion
120
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
*tation* at <er*oAa, +hod%$nder N Aare7 )ith total in*talled ca"acit7 o' 00 -<A, 00
-<A N B00 -<A re*"ectiAel76
Distri9ution
All 'n#ia Scenerio
Reliance 2nerg7 :tdO* net)ork coAer* an area o' a%o$t 1,2B,00 *(6 kilo&eter*6 R2: ha*
h$ge c$*to&er %a*e o' F &illion )ith an ann$al con*$&"tion o' 1F,600 &illion $nit*6
Mum9ai Scenerio
The co&"an7I* net)ork i* &ade o' B12B di*tri%$tion *$%-*tation*, 2912 k& o' high
ten*ion .HT/ and 2966 k& o' lo) ten*ion .:T/ ca%le6 R2: ha* an in*talled di*tri%$tion
tran*'or&er ca"acit7 o' a%o$t 2B22 -<A6 The net)ork ha* lo)e*t di*tri%$tion lo**e* o'
16!J and &aintain* an $"ti&e o' 9969;J6
Services
The 'ir*t -illenni$& B$*ine** A)ard in*tit$ted %7 3nternational 4ha&%er o' 4o&&erce
.The +eneration diAi*ion ha* eG"erti*e in de*igning, engineering, erection, in*tallation
and co&&i**ioning o' "o)er "roHect* %a*ed on coal, lignite, co&%ined c7cle li($id, ga*,
)ind a* )ell a* co-generation "roHect*6
4ontract* and 2P4 ,iAi*ion: The diAi*ion o''er* Aal$e added *erAice* in 2ngineering,
Proc$re&ent and 4on*tr$ction6 #o&e o' the "re*tigio$* "roHect* eGec$ted incl$de:
210 -8 +a* Ba*ed 4o&%ined 47cle Po)er Plant 'or B#2# Andhra Po)er
:i&ited at #a&alkot
2B -8 Baga**e 'ired Po)er Plant o' +odaAari #$gar -ill* in 1orth 9arnataka
and the
20-8 "roHect o' #$r7achakra Po)er 4or"oration :i&ited at Anda&an6
121
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
A!ar#s
Reliance 2nerg7 :td6 contri%$tion* in the area* o' enriching the ecolog7 and initiatiAe* in
4or"orate +oAernance ha* receiAed )ide acclai&6 Reliance 2nerg7 :td6 in the recent
7ear* ha* receiAed the 'ollo)ing A)ard*:
The 3ndo-+er&an Ann$al 2nAiron&ent 2Gcellence A)ard - 2000 %7 +reentech
Fo$ndation6
F3443 A)ard 1999-2000 'or o$t*tanding achieAe&ent in 2nAiron&ent
4on*erAation and Poll$tion 4ontrol %7 the Federation o' 3ndian 4ha&%er* o'
4o&&erce N 3nd$*tr76
.344/ and 0nited 1ation* 2nAiron&ent Progra&&e .012P/ 'or it* o$t*tanding
contri%$tion to enAiron&ental &anage&ent6 Reliance 2nerg7 :td6 i* the onl7
co&"an7 'ro& 3ndia and onl7 one o$t o' t)o "o)er $tilitie* in the )orld .the other
%eing Tok7o Po)er 4o&"an7 o' Ea"an/ to haAe %een hono$red )ith thi* A)ard6
Be*t 2nAiron&ental and 2cological 3&"le&entation +old A)ard con'erred %7
3nternational +reenland #ociet76
RaHiA +andhi 1ational S$alit7 A)ard 2001 'or "roAiding ($alit7 and eGcellence
in eAer7 a*"ect o' it* '$nctioning,
The +olden Peacock A)ard 'ro& the 3n*tit$te o' ,irector* 'or eGcellence in
4or"orate +oAernance6
122
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
,ahan$ Po)er #tation )a* adH$dged a* the Be*t Po)er #tation o' the co$ntr7 in
the !00 -8 and %elo) range and )a* con'erred the 2nAiron&ental A)ard on the
occa*ion o' Ther&al 4entenar7 4ele%ration* 19996
Rotar7 <ocational A)ard 'or 2Gcellence in 4or"orate +oAernance6
The +-F1 -illenni$& A)ard in the 'ield o' -other 2arth Protection con'erred %7
the 3ndian 3n*tit$te o' 2colog7 and 2nAiron&ent on the occa*ion o' the 8orld
2nAiron&ental 4ongre**6
-443 ,r R E Rathi A)ard 199; to Reliance 2nerg7 :td6 'or "oll$tion control in
the categor7 o' K1on-4he&ical 3nd$*trie*I %7 the -ahratta 4ha&%er o' 4o&&erce
N 3nd$*trie* .-443/6
The Rotar7 3nternational o' +$Harat, -adh7a Prade*h and RaHa*than con'erred the
Q2Gcellence in 4or"orate +oAernance A)ardQ on Reliance 2nerg7 :td6
34#3 A)ard 'or "$r*$it o' +ood +oAernance Practice* in the 7ear 20016
The*e a)ard* and recognition* greatl7 &otiAate and enco$rage the Reliance 2nerg7 :td6
tea& to *et 're*h %ench&ark* in cor"orate goAernance, "artic$larl7 in the 3ndian Po)er
*ector6
Iualit8 olic8
R2: i* co&&itted to %e a&ong*t the &o*t ad&ired N tr$*ted integrated 2lectric
#$""l7 0tilit7 4o&"anie* in the )orld6
R2: *hall deliAer relia%le and ($alit7 "rod$ct* and *erAice* to all c$*to&er* at
co&"etitiAe co*t*, )ith international *tandard* o' c$*to&er care there%7 creating
*$"erior Aal$e 'or all *takeholder*6
12
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
R2: i* co&&itted to co&"l7 )ith re($ire&ent* and contin$all7 i&"roAe the
e''ectiAene** o' the S$alit7 -anage&ent #7*te& a* "er 3#5 9001:20006
R2: *hall *et ne) %ench&ark* in *tandard* o' cor"orate "er'or&ance and
goAernance thro$gh the "$r*$it o' o"erational @ enAiron&ental and 'inancial
eGcellence, re*"on*i%le citi?en*hi", and "ro'ita%le gro)th6
Iualit8 (9Dectives
The ($alit7 o%HectiAe* o' R2: are to:
To attain glo%al %e*t "ractice* and %eco&e a )orld-cla** $tilit76
To "roAide $ninterr$"ted, a''orda%le, ($alit7, relia%le and clean "o)er, to &illion*
o' c$*to&er*6
To achieAe eGcellence in *erAice, ($alit7, relia%ilit7, *a'et7 and c$*to&er care6
To earn the tr$*t and con'idence o' all c$*to&er* and *takeholder*, eGceeding their
eG"ectation*, and &ake the co&"an7 a re*"ected ho$*ehold na&e6
To )ork )ith Aigor, dedication and innoAation, )ith total c$*to&er *ati*'action a*
the $lti&ate goal6
To con*i*tentl7 achieAe high gro)th )ith the highe*t leAel* o' "rod$ctiAit76
To %e a technolog7 driAen, e''icient and 'inanciall7 *o$nd organi?ation6
To %e a re*"on*i%le cor"orate citi?en n$rt$ring h$&an Aal$e* and concern 'or
*ociet7, the enAiron&ent and nation %$ilding6
To enco$rage idea*, talent and Aal$e *7*te&*6
To $"hold the g$iding "rinci"le* o' tr$*t, integrit7 and tran*"arenc7 in all a*"ect*
o' interaction* and dealing*6
12B
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
., 1hiloso1h8
To achieAe the*e o%HectiAe* the HR Polic7 i* "iAotal and ai&* to:
AchieAe organi?ational and %$*ine** goal* )ith 'ir& %elie' that QOur Employees
are our FutureQ6
HaAe empowered and accountable employees to take deci*ion* in re*"on*e to
e&erging challenge* and o""ort$nitie* in a co&"etitiAe enAiron&ent6
2ndeaAor to &ake o$r e&"lo7ee* "The Best" )ith an $rge 'or and co&&it&ent to
eGcellence6
Reliance 2nerg7I* Ai*ion i* to deliAer )orld-cla** "rod$ct* and *erAice* to it* c$*to&er*
at co&"etitiAe co*t*, )ith international *tandard* o' c$*to&er care6 Antici"ating c$*to&er
need* and '$l'illing the& i* the center o' o$r %$*ine** %elie'*6
#o&e initiatiAe taken %7 R2: to reach o$t to their con*$&er*6 To li*t a 'e)
F$ll7 co&"$teri?ed c$*to&er care center*6
2BC! Po)er Hel" n$&%er 0000 'or an7 kind o' ($erie* and co&"laint*6
3nteractiAe )e%*ite )))6rel6co6in, )herein 7o$ can Aie) all the %illing detail*,
)ith 1 7ear* "a*t con*$&"tion, &eter hi*tor7 and $*age hi*tor7
-$lti"le "a7&ent o"tion*, )hich incl$de &ore than 2000 collection "oint* all oAer
the cit7 at conAenient location*,
2a*7 "a7&ent "roced$re* like 24#, <,# and online %ill "a7&ent 6
12F
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
+reen Belt ,eAelo"&ent Progra&:
The land 'or the Po)er "lant )a* &ar*h7, *l$*h7 and %arren6 Thi* )a* conAerted into
green "iece o' land %7 &a**iAe "lantation and 'ore*tation "rogra& i&"le&ented in "ha*e*
*ince %eginning6
The ($ant$& o' "lantation i* eG"lained %7 'ollo)ing record* P )ith it* &ore than lakh*
'ore*t "lant*, F0 tho$*and orna&ental "lant* and &o*t i&"ortantl7 &ore than 1 crore
&angroAe* along the creek*6
"reen Belt #evelo1ment #etails
126
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
C(MA,'S($ (F "C'% +'). )A)A
C(MA,'S($ (F "C'% +'). )A)A
Driven 98 "ro!th = Fuelle# 98 o!er
Recogni?ed a* 3ndiaI* large*t "riAate *ector "o)er $tilit7, )ith a re"$tation 'or
tr$*t)orthine**, %$ilt $" oAer nearl7 nine decade*, Tata Po)er *$rge* ahead into 7et
another 7ear )ith "lan* o' *$*tained gro)th, greater Aal$e to con*$&er and relia%le
"o)er *$""l76
:ed %7 a "o)er'$l Ai*ion, Tata Po)er "ioneered the generation o' electricit7 in 3ndia6 3t
ha* no) *$cce**'$ll7 *erAed the -$&%ai con*$&er* 'or oAer ninet7 7ear* and ha* *"read
it* 'oot"rint* acro** the nation6 Toda7, it i* the co$ntr7I* large*t "riAate "la7er in the
*ector6 A"art 'ro& -$&%ai and ,elhi, the co&"an7 ha* generation ca"acitie* in EoHo%era,
Eharkhand and 9arnataka6
Tata Po)er ha* an in*talled "o)er generation ca"acit7 o' a%oAe 200 -ega 8att*, )ith
the -$&%ai "o)er %$*ine**, )hich ha* a $ni($e &iG o' Ther&al and H7dro Po)er,
generated at the Ther&al Po)er #tation, Tro&%a7, and the H7dro 2lectric Po)er #tation*
at Bhira, BhiA"$ri and 9ho"oli, acco$nting 'or 1!9! -86 3t* diAer*e generation
ca"a%ilit7 'acilitate* the co&"an7 in "rod$cing lo) co*t energ7, there%7 giAing it*
con*$&er* a greater Aal$e 'or &one76
A&ong it* &an7 achieAe&ent* that Tata Po)er can "ro$dl7 %oa*t o' are the in*tallation
and co&&i**ioning o' 3ndiaI* 'ir*t F00 -8 $nit .at it* Ther&al Po)er +enerating
#tation, Tro&%a7/ the 1F0 -8 P$&"ed #torage 0nit at it* H7dro +enerating #tation,
Bhira, and enAiron&ental control *7*te&* like the Fl$e +a* ,e*$l"h$ri?ation "lant6 Tata
Po)er ha* a 'ir*t o' it* kind Hoint Aent$re )ith o!er "ri# Cor1oration o/ 'n#ia 'or the
12!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
1200 k& Tala Tran*&i**ion ProHect6 Tata Po)er Trading 4o&"an7 :i&ited .TPT4:/, a
)holl7 o)ned *$%*idiar7 o' the Tata Po)er 4o&"an7 .TP4/ ha* %een a)arded the 'ir*t
eAer "o)er trading licen*e %7 the 4entral 2lectricit7 Reg$lator7 4o&&i**ion .42R4/
$nder *ection 1B o' the 2lectricit7 Act 200, ena%ling it to carr7 o$t tran*action* all oAer
3ndia6
International Projects
:eAeraging $"on it* engineering *kill* and $nder*tanding o' the "o)er %$*ine**, Tata
Po)er ha* carried o$t *eAeral oAer*ea* "roHect* and *$cce**'$ll7 co&"leted erection,
te*ting and co&&i**ioning o' &aHor "o)er "roHect* in #a$di Ara%ia, Banglade*h, 9$)ait,
Algeria, -7an&ar and Thailand6 The co&"an7 ha* al*o $ndertaken "roHect* "ertaining to
"o)er "lant @ o"eration* &anage&ent and "lant o"eration* training6
Strategic Electronics Division (SED)
The #trategic 2lectronic* ,iAi*ion o' Tata Po)er ha* %een in o"eration 'or oAer 0 7ear*
and ha* %een "$r*$ing deAelo"&ent and "rod$ction actiAitie* 'or the 3ndian de'ence
*ector6 #2, *$cce**'$ll7 deAelo"ed the -$lti Barrel Rocket :a$ncher, KPinakaI, "roAen
in the 'ield thro$gh eGtended $*er trial* )hich led to it* ind$ction into the 3ndian Ar&76
The ,iAi*ion ha* deAelo"ed *"eciali*ed e($i"&ent 'or Air ,e'ence and 1aAal 4o&%at
*7*te&*6
orporate Social !esponsi"ility
Tata Po)er i* co&&itted to *etting high *tandard* in it* "$r*$it o' *ocial re*"on*i%ilit7
and re&aining *en*itiAe to the i**$e* o' re*o$rce con*erAation, enAiron&ent "rotection
and enrich&ent and deAelo"&ent o' local co&&$nitie* in it* area* o' o"eration*6 The
co&"an7 ha* a *i&"le "hilo*o"h7 that g$ide* it* actiAitie* in the*e &atter*, =+iAing %ack
i* a &ean* to)ard* going aheadQ6 Their )ide*"read "rogra&&e* on %iodiAer*it7
12;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
con*erAation, a''ore*tation, "i*cic$lt$re, 'a&il7 "lanning, health *erAice*, "ri&ar7 and
*econdar7 ed$cation and &an7 &ore haAe &ade inroad* into the tin7 ha&let* and tri%al
region* o' o$r h7dro catch&ent area* and it i* o$r endeaAo$r to light $" the*e dark and
narro) *treet* to ne) da)n*6
#$ar%s
433 2C3- Bank A)ard 200F Q4erti'icate 'or #trong 4o&&it&ent to 2GcelQ6
=2nerg7 2''icient 0nit A)ard> at the 1ational A)ard 'or 2Gcellence in 2nerg7
-anage&ent 200F 'or TN, diAi*ion* cond$cted %7 4336
EoHo%era ha* %een declared a* the )inner o' +olden Peacock #"ecial
4o&&endation 4erti'icate 'or the 7ear 200F .11 E$ne 200F/6
Tata Po)er a&ong the to" 1 Be*t -anaged 4o&"anie* in 3ndia %7 B$*ine**
Toda7 AT 9earne7 .11 -arch 200F/6
The 2
nd
8art*ila -anto*h #ondhi A)ard 'or o$t*tanding contri%$tion to the
3ndian Po)er #ector in 200B6
+reentech 2nAiron&ent 2Gcellence A)ard: Platin$& to EoHo%era Ther&al Po)er
Plant, Eharkhand in 200B6
+reentech #a'et7 A)ard: +old to Tro&%a7 Ther&al Po)er #tation, -$&%ai in
200B6
The Po)er Plant A)ard, in*tit$ted %7 2lectric Po)er 3nternational, to the Tro&%a7
Ther&al Po)er #tation in 199F6
129
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
&ision
To %e the &o*t ad&ired 3ntegrated Po)er and 2nerg7 4o&"an7 deliAering *$*taina%le
Aal$e to all *takeholder*6
'ission
+e !ill 9ecome the most a#mire# com1an8 #elivering sustaina9le value 980
Being a Partner o' 4hoice and eGceeding *takeholder eG"ectation*
2n*$ring "ro'ita%le gro)th and Aal$e to *takeholder*
3nnoAating and de"lo7ing c$tting edge *ol$tion* %a*ed on eco-'riendl7
technologie*
Relentle**l7 "$r*$ing o""ort$nitie*, ca"itali*ing on *7nergie* in the "o)er and
energ7 Aal$e chain, and eG"anding o$r "re*ence in related %$*ine**e* o' intere*t
Being an 2&"lo7er o' 4hoice and creating a c$lt$re o' e&"o)er&ent and high
"er'or&ance
4aring 'or the *a'et7, enAiron&ent and )ell-%eing o' c$*to&er*, e&"lo7ee* and
co&&$nitie*6
&alues
'ntegrit8: Hone*t7, 'airne** and tran*"arenc7 in o$r cond$ct and tran*action*
)rust: Faith and %elie' in each other
Colla9oration: 2Gcellence thro$gh tea&)ork, )ithin e&"lo7ee* and "artner*
Agilit8: #"eed7, re*"on*iAe and "roactiAe, achieAed thro$gh e&"o)ering
e&"lo7ee*
,es1ect: Treat all *takeholder* )ith re*"ect and dignit7
*Ecellence: Bettering *tandard* contin$o$*l7, )ith "a**ion and "ride
10
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
(argest) 'ost !elia"le an% E**icient Private Sector Energy 'ajor
Tata Po)er, er*t)hile kno)n a* Tata 2lectric, "ioneered the generation o' electricit7 in
3ndia nine decade* ago6 Toda7, it i* the co$ntr7O* large*t "riAate "o)er $tilit7, e*ta%li*hed
a* a licen*ee in -$&%ai and )ith a&%itio$* eG"an*ion "lan* 'ro& %eing e**entiall7
-$&%ai-centric to a &aHor national "la7er, not onl7 in the 'ield* o' Po)er %$t al*o in
2nerg7 and Broad%and 4o&&$nication6
Tata Po)er i* the one co&"an7 )ith "re*ence in all a*"ect* o' Po)er, %e it Ther&al,
H7dro, #olar, 8ind 2nerg7, Tran*&i**ion N ,i*tri%$tion6
Tata Electric+s ,e$ Entity
Prior to 1
*t
A"ril 2000 the Tata 2lectric 4o&"anie* co&"ri*ed o' the 'ollo)ing three
4o&"anie*:
The Tata H7dro-2lectric Po)er #$""l7 4o&"an7 :i&ited, e*ta%li*hed in 19106
The Andhra <alle7 Po)er #$""l7 4o&"an7 :i&ited, e*ta%li*hed in 19166
The Tata Po)er 4o&"an7 :i&ited, e*ta%li*hed in 19196
8ith e''ect 'ro& that da7 Andhra <alle7 and Tata H7dro &erged into Tata Po)er to
re*$lt in one large $ni'ied entit76
'um"ai Po$er is Tata Po$er
,$ring the ninet7 long 7ear*, the energ7 "rod$ced %7 Tata Po)er ha* co$r*ed thro$gh
-$&%aiO* Aital*, relia%l7 and econo&icall7, hel"ing the cit7 achieAe and retain it*
"re&i$& *tat$* -- the co&&ercial ca"ital o' 3ndia6 The challenging ta*k o' &eeting the
eAer-gro)ing "o)er need* o' the ind$*trial &etro"oli* o' the co$ntr7 ha* %een "o**i%le
%eca$*e o' e''icient tran*&i**ion and di*tri%$tion o' energ7, and con*tant $"grading o'
technolog7 %7 the 4o&"an76
11
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
Po$er Status
Tata Po)er i* licen*ed to generate, tran*&it and di*tri%$te "o)er to the cit7 o' -$&%ai
and it* *$%$r%*6 Fro& 4ola%a in the #o$th to Ba**ein 4reek on the 1orthern end and
<ikhroli on the 4entral *ide, the co&"an7 *erAice* the do&e*tic and co&&ercial
con*$&er* thro$gh it* di*tri%$tion licen*ee*, B2#T and Reliance 2nerg7 :i&ited6
Direct 'ar-eting
The 4o&"an7 al*o *$""lie* "o)er directl7 to *$ch %$lk con*$&er* a* 4entral and
8e*tern Rail)a7*, -$&%ai Port, re'inerie*, teGtile &ill*, 'ertili?er 'actorie*, BAR4,
-$nici"al 4or"oration )ater "$&"ing "lant* and other &aHor ind$*trie* $*ing contin$o$*
"roce**e* re($iring $ninterr$"ted "o)er *$""l76 The late*t addition to the li*t i* the
co&&ercial di*trict at the Bandra-9$rla 4o&"leG and &aHor co&&ercial and re*idential
co&"leGe* in the *$%$r%*6
,et$or- o* !elia"ility
3n "o)er *$""l7, grid* en*$re *ta%ilit76 Tata Po)erO* "o)er *7*te&* in 8e*tern 3ndia are
interconnected )ith the 8e*tern Region +rid, incl$ding the #tate 2lectricit7 Board* o'
-ahara*htra, +$Harat, -adh7a Prade*h, +oa and Tara"$r 1$clear Po)er #tation6
ompetitive Tari**s
Tata Po)er enHo7* an $nriAalled co*t-adAantage in electricit7 "rod$ction )hich it ha*
achieAed %7 reg$larl7 $"grading technolog7 to the *tate-o'-the-art and a $ni($e &iG o'
h7dro and ther&al generating ca"acit76 The 4o&"an7 ha""il7 *hare* thi* adAantage )ith
it* c$*to&er*, in ter&* o' co&"etitiAe tari''*, &aHor %ene'iciarie* %eing direct con*$&er*
a* the7 "a7 the lo)e*t tari''* in -$&%ai6
onsumer First
12
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The c$*to&er re&ain* the king eAen in a de&ocrac7X The o"ening $" o' the reg$lated
econo&7 &a7 haAe t$rned the *"otlight on the con*$&er "re*entl76 B$t the con*$&er ha*
al)a7* enHo7ed thi* coAeted *tat$* eAer *ince the ince"tion o' the three Tata 2lectric
4o&"anie*6 The 4o&"an7O* dedicated 4on*$&er #erAice +ro$", )ith it* o''ice at
Techno"oli* Park, Andheri, i* al)a7* at the *erAice o' the c$*to&er*6 3t "roAide* *erAice*
'or ne) connection* and al*o eGtend* technical a**i*tance to con*$&er* on energ7
con*erAation and other electrical *$""ort *erAice* to hel" &ini&i*e energ7 co*t*6
o!ering *E1ansion
8ith it* 'ir& %a*e in -$&%ai, Tata Po)er ha* no) aggre**iAel7 Aent$red into ne)
"a*t$re* in the co$ntr7 )ith the o%HectiAe o' %eco&ing a &aHor national "la7er in the
7ear* to co&e6
In In%ia
Tata Po)er ha* alread7 regi*tered it* national "re*ence6 3t* t)o ther&al "o)er "lant* in
Eharkhand and 9arnataka re*"ectiAel7 are alread7 o"erational6 The 4o&"an7 i* "$r*$ing
o""ort$nitie* in *etting $" 3PP* @ 4PP* on OB$ild 5)n 5"erateO .B55/ %a*i*6
Overseas
Tata Po)er ha* *$cce**'$ll7 co&"leted erection, te*ting, co&&i**ioning and trial
o"eration* o' &aHor oAer*ea* "o)er "roHect* in a n$&%er o' co$ntrie*, incl$ding 0A2,
-ala7*ia, #a$di Ara%ia, 9$)ait and Algeria6 The 4o&"an7 ha* al*o $ndertaken "roHect*
"ertaining to "o)er "lant @ $tilit7 o"eration* &anage&ent and "lant o"eration* training in
#a$di Ara%ia, :i%eria, 3ran, #ierra :eone and Algeria6
(ea%er in Total Po$er 'anagement
Tata Po)er, the "ioneer toda7, al*o enHo7* the "riAilege o' %eing the leader:
1
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
:icen*ed in*talled generation ca"acit7 o' 1!9; -8 'or -$&%ai - :arge*t %7 an7
:icen*ee
3ndiaI* large*t "o)er $tilit7 - Acco$nt* 'or F2J o' the total generating ca"acit7 o'
the "riAate *ector a* a licen*ee
#trong track record o' "r$dent &anage&ent and gro)th
Fir*t eAer :oad ,e*"atch 4enter in 3ndia to haAe gotten 3#5 4erti'ication .11
A$g$*t 200B/
Enterprising Diversi*ication
Fro& it* niche Po)er %$*ine**, Tata Po)er i* &aking a con'ident &oAe to)ard* the
eGciting 4o&&$nication %$*ine** on one end o' the *"ectr$& and the challenging 2nerg7
%$*ine** on the other end6 0tili*ing it* eG"erti*e and inAe*t&ent in "o)er *7*te&* and
eGi*ting in'ra*tr$ct$re, *"read acro** -$&%ai and it* *$%$r%*, the 4o&"an7 i* *etting $"
a Broad%and net)ork that )ill *oon %e o"erational6
ommitment to Environment onservation
:ong %e'ore the "re*ent glo%al ecological concern, Tata Po)er reali*ed it* &oral and
cor"orate re*"on*i%ilit7 to)ard* enAiron&ent "rotection6 The 4o&"an7 ha*:
Planted oAer 1 4rore *a"ling* in the la*t 0 7ear*
3n*talled "oll$tion-control e($i"&ent )orth oAer R*6100 crore* at the
Tro&%a7 Ther&al Po)er Plant
Tata Po)er ha* actiAel7 "artici"ated in the %$ilding and &aintaining o' garden*
and "ark* in the tee&ing -$&%ai -etro"oli*6
Tata Po)er actiAel7 *$""ort* "i*cic$lt$re actiAitie* at their h7dro *tation* %7
a**i*ting in the %reeding o' 'i*he* like the -ah*heer6
Strategic Electronic Division (SED)
1B
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
3n the 0+ 7ear* o' it* "re*ence in #trategic 2lectronic*, Tata Po)er #2, ha* de*igned
and deAelo"ed electronic "rod$ct* and *7*te&* $*ing *tate-o'-art technolog7, 'or ,e'ence
and other core *ector*6 8ith oAer 90J o' the ,iAi*ionO* *trategic electronic* )ork
eGec$ted 'or ,e'ence, #2, ha* e*ta%li*hed long-*tanding relation*hi"* )ith the 3ndian
Ar&ed Force* and the ,e'ence :a%oratorie*6
#2, .-$&%ai/ )a* e*ta%li*hed in 196! and i* toda7 a leading deAelo"&ent organi*ation,
haAing "ioneered indigeno$* de*ign and deAelo"&ent o' &an7 hi-tech *7*te&* 'or
,e'ence and 3nd$*tr76 The &an$'act$ring 'acilit7 )a* e*ta%li*hed in 19;2 and i* *it$ated
in Bangalore6
The -$&%ai o"eration i* recogni*ed %7 the ,e"art&ent o' #cience and Technolog7, and
the Bangalore 'acilit7 i* 3#5 9001-2000 certi'ied6 #2,O* 'orte i* the deAelo"&ent and
integration o' real-ti&e and &i**ion-critical deci*ion-*$""ort *7*te&*, *$ita%l7
r$ggedi*ed to o"erate in har*h enAiron&ent* o' Aar7ing *eAerit76 The ,iAi*ion i* 'oc$*ed
to deliAer in thi* "rod$ct niche6
3t* range o' "rod$ct* %ear* )itne** to the &$lti"le di*ci"line* in )hich the ,iAi*ion ha*
garnered the re($i*ite eG"erti*e6 The*e di*ci"line* *"an a Aer7 %road *"ectr$&, )hich
incl$de* *7*te& conce"t$ali*ation, hard)are and *o't)are de*ign, engineering and
integration6
1F
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
ro#ucts #evelo1e# in the last 53 8ears inclu#e0
AdAanced di*"la7 con*ole* 'or 4B3 a""lication*
#erAo controller* and a**ociated &echanical *tr$ct$re* 'or tracking "lat'or&*
A range o' *o't)are "rod$ct* 'or real-ti&e @ &i**ion-critical deci*ion-*$""ort
a""lication*
R$gged 4o&"$ter* and *"ecial "$r"o*e co&"$ter* coAering d$al-red$ndant 'a$lt-
tolerant con'ig$ration*, and
Training #i&$lator* 'or :oco&otiAe*, Po)er Plant* N Air Tra''ic 4ontrol
8ith the 'or&ida%le Tata re"$tation and #2,O* technical and &anage&ent eG"erti*e, the
,iAi*ion i* %eing increa*ingl7 entr$*ted )ith the integration o' large and co&"leG
*7*te&*, re($iring eGten*iAe inter'acing and integration o' hard)are and *o't)are in"$t*
'ro& diAer*e *o$rce*6
1ota%le recent achieAe&ent* in thi* area are:
2lectronic 8ar'are 4ontrol 4entre 'or the Ar&7
4o&%at #7*te&* 'or the 1aA7
AdAanced A$to&atic ,ata Handling Air ,e'ence #7*te& 'or the Air Force, and
AdAance A$to&otiAe 2lectrical #7*te& 'or the Ar&7O* -ain Battle Tank6
3n *$&&ar7, the #trategic 2lectronic ,iAi*ion ha* %een contri%$ting in it* )a7 to)ard*
*erAing 3ndiaO* 1ational #ec$rit7 and ,e'ence need*6 The ,iAi*ion )ill contin$e to
*"earhead, in concert )ith other Tata +ro$" 4o&"anie* a* nece**ar7, the indigeno$*
deAelo"&ent, "rod$ction and integration o' adAanced *7*te&*6
16
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
)ata o!er also eEten#s its eE1ertise /or0
#etting $" 3nde"endent Po)er Plant* .3PP/
#etting $" 4a"tiAe Po)er Plant* .4PP/
Po)er Tran*&i**ion and ,i*tri%$tion ProHect*
5"eration and -aintenance #erAice* .5N- #erAice*/
5Aer*ea* "roHect*
- 2rection, Te*ting, 4o&&i**ioning N Trial 5"eration*
- Po)er Plant @ 0tilit7 5"eration* -anage&ent and Plant 5"erator* Training
Transmission Business
Tata Po)er o)n* and o"erate* 1200 circ$it 9&* o' high Aoltage .220 k< and 110 k</
Tran*&i**ion 1et)ork6
The 4o&"an7 recentl7 took a F1J *take in the R* 1200 4r, 1200 9& Tala Tran*&i**ion
"roHect, )hich i* a Hoint Aent$re )ith the Po)er +rid 4or"oration o' 3ndia6 The E<
4o&"an7 na&ed Po)erlink* Tran*&i**ion :i&ited, ha* %een 'or&ed "ri&aril7 to
eAac$ate "o)er 'ro& the Tala H7dro ProHect in Bh$tan and to carr7 *$r"l$* electricit7
'ro& the 1orth 2a*tern #tate* to the 1orthern 3ndian %elt6 The 4o&"an7 &ake* it*
"re*ence 'elt in generation in 1orthern 3ndia %7 "artici"ating in the 0 -8 H7dro
+eneration ProHect in the *tate o' 0ttaranchal6
Distri"ution Business
Tata Po)er ha* a 9F k& HT and :T ca%le di*tri%$tion net)ork connecting 1! &aHor
receiAing *tation* and oAer ;F *$%-*tation* in it* -$&%ai :icen*e area6 8ith the
"riAati*ation o' ,elhi <id7$t Board .,<B/, Tata Po)er 4o&"an7 hold* &anaging
1!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
control in the di*tri%$tion co&"an7 1orth ,elhi Po)er :i&ited .1,P:/6 1,P: toda7
di*tri%$te* and *$""lie* "o)er to the 1orth-1orth 8e*t area* o' ,elhi6 8ith
"redo&inantl7 ind$*trial load con*$&"tion, thi* region ha* a con*$&er %a*e o'
a""roGi&atel7 ; lakh* )ith an ann$al "o)er con*$&"tion o' aro$nd 6000 -0*6
)ata o!er along !ith its associate com1anies also 1rovi#es the 9ene/it o/ a single
!in#o! service /or0
Fea*i%ilit7 *t$die*
,e*ign N 2ngineering
Proc$re&ent
3n*tallation
Te*ting N 4o&&i**ioning
5"eration N -aintenanc
.ealth / Sa*ety 0 Putting People First
8hen it co&e* to achieAing )orld-cla** health and *a'et7 "er'or&ance, thereO* no roo&
'or co&"ro&i*e at Tata Po)er6 And itO* not a%o$t *tati*tic*P itO* a%o$t kee"ing "eo"le
*a'e6 3t a""lie* to eAer7 e&"lo7ee eAer7)here, )hether )alking do)n an o''ice hall)a7
or )orking in a "o)er "lant6 The *a'et7 and health o' o$r "eo"le i* the "rinci"al
con*ideration in the 'ra&ing o' o$r "olicie* and all o$r %$*ine** actiAitie*6
Tata Po)er inAe*t* a large a&o$nt o' re*o$rce* to red$ce )ork"lace accident* and en*$re
a *a'e )orking enAiron&ent6 The co&"an7 "rotect* the intere*t* o' it* e&"lo7ee* %7
"roAiding the& )ith a""ro"riate and $"-to-date training and acce** to deAelo"&ent
"rogra&&e*6
1;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
B7 adhering to )orld *a'et7 *tandard*, "ro&oting "rod$ct and o"erational *a'et7, and
enco$raging the actiAe "artici"ation o' eAer7 e&"lo7ee, Tata Po)er ha* created a health7
)ork enAiron&ent that co&"le&ent* it* *$"erior %$*ine** "er'or&ance6
Environment Protection
Striving /or Mero Acci#ents an# 'nDuries
8e haAe created "rogra&&e* to "ro&ote )orker and contractor *a'et7 on the road, in the
la%orator7 and )hereAer )e o"erate )orld)ide6 8e are co&&itted to red$cing *a'et7
incident* to ?ero6 And )e "lace the highe*t "riorit7 on the health and *a'et7 o' o$r
)ork'orce, on the "rotection o' o$r a**et* and on *a'eg$arding the enAiron&ent6
rotecting Against 'llness an# Diseases
3llne**e* *$ch a* H3< @ A3,# and 4ardioAa*c$lar di*ea*e* haAe enor&o$* *ocial and
econo&ic i&"act*6 The7 directl7 a''ect &an7 o' o$r e&"lo7ee* and their 'a&ilie*, the
co&&$nitie* in )hich )e o"erate, and o$r %$*ine**6 Tata Po)er ha* 'or&all7 la$nched a
co&"an7)ide H3< @ A3,# "olic7 that i* con*i*tent )ith o$r %elie' that co&"anie* can %e
i&"ortant "artici"ant* in the e''ort to 'ight H3< @ A3,#6 8e haAe 'oc$*ed on ed$cation,
"reAention and treat&ent and on "rotecting the right* o' H3<-"o*itiAe e&"lo7ee* and
"artner*6 Tata Po)er ha* al*o increa*ed a)arene** and o''er* "ractical *te"* to hel"
e&"lo7ee* red$ce illne**e* 3n kee"ing )ith the &otto o' the Tata +ro$", Tata Po)er ha*
con*tantl7 giAen high "riorit7 to *ocial concern*6
19
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
C(MA,A)'-* S)2D& (F F'$A$C'A% ,*S2%)S
C(MA,A)'-* S)2D& (F F'$A$C'A% ,*S2%)S
Ann$al Re*$lt* .Fig$re* in R* crore/
Com1an8 Sales (1erating
ro/it
'nterest "ross
ro/it
*S
P+43: 1BF6B 2F2B6FB 9B!6BF 19;6606 2699
1TP4 2616!0 1009620 1;F96B0 109;26;0 ;6
R3: F69269F B;06BF 2F062 11126B F606
TATA
Po)er :td6
B!1F62 !226B 1;96F0 ;!!69 F621
1B0
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
,*C(MM*$DA)'($S
,*C(MM*$DA)'($S
Polic7 Reco&&endation*
Po)er *hortage*, lagging "$%lic inAe*t&ent and "oor "er'or&ance o' *tate $tilitie*
tran*lated into a need to attract "riAate "artici"ation in the "o)er *ector in deAelo"ing
co$ntrie*6 Thi* )a* 'acilitated, o'ten $nder the g$idance o' &$ltilateral deAelo"&ent
agencie*, %7 re'or&* and re*tr$ct$ring in the *ector6 <ario$* co$ntrie* haAe 'ollo)ed
di''ering "ath* and "ace* to *$ch a re'or& "roce**6 Thi* incl$ded introd$ction o' "olicie*
to "er&it "riAate inAe*t&ent in the *ector, "artial or '$ll diAe*tit$re o' "$%lic a**et*,
*etting $" o' inde"endent reg$lator7 in*tit$tion* and "o)er &arket
Polic7 #ta%ilit7 and Red$ction in Reg$lator7 0ncertaint7
0ncertaint7 i* $niAer*all7 di*liked %7 inAe*tor*6 An a""roach 'or enco$raging "riAate
inAe*t&ent in the "o)er *ector *ho$ld 'oc$* on red$cing ri*k it*el' rather than allocating
it .-alhotra, 199!/6 Thi* )o$ld increa*e the n$&%er o' %anka%le "roHect*, )hich are
lacking in deAelo"ing co$ntrie* like 3ndia6 8hile co&&ercial ri*k re&ain* a "art o' $*$al
%$*ine** endeaAor, "olic7 and reg$lator7 ri*k i* %e*t addre**ed thro$gh tran*"arent and
"redicta%le "olicie* and reg$lation*6 A road&a" to the "roce** o' re'or&* and a &$lti-
7ear reg$lator7 'ra&e)ork at the *tate leAel can hel" to red$ce the*e ri*k*6 ,e*"ite central
a* )ell a* *tate goAern&ent* "roAiding Aario$* 'i*cal and other incentiAe* 'or "riAate
inAe*t&ent in the *ector, the $ncertaint7 a**ociated )ith their *co"e and contin$it7 'ail* to
enli*t inAe*tor*I co&&it&ent 'or long-ter& "roHect*6 A "iece&eal a""roach to re'or&*
generall7 dil$te* the intere*t o' the inAe*tor*, )ho need to *ec$re lender*I co&&it&ent
'or long-ter& '$nd* on the %a*i* o' tran*"arent and *ta%le "olicie*6 3ndia ha* a "o*itiAe
1B1
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
legac7 o' a *trong legal *7*te&6 Ho)eAer, concern 'or "olic7 reAer*al* loo&* large in a
"olitical regi&e6 Thi* deter* inAe*tor*, &ore "artic$larl7 the 'oreign inAe*tor*, to Aent$re
into H$ri*diction* characteri?ed %7 "olitical in*ta%ilit76
The inde"endence o' reg$lator7 in*tit$tion* i* another concern 'or inAe*tor*6 A lack o'
inde"endence &a7 oAer*hado) a tari'' rationali*ation "rogra& d$e to it* "otential B;
:i&ited electricit7 trade )ith 1e"al .net eG"ort/ and Bh$tan .net i&"ort/ i* deno&inated
in the 3ndian c$rrenc76
"olitical re"erc$**ion* and al*o in'l$ence* reg$lator7 certaint7 o'ten $nder the in'l$ence
o' a changing "olitical regi&e6 Thi* li&it* the licen*ee*I a%ilit7 to recoAer their co*t* and
earn a rea*ona%le rate o' ret$rn6 The 1ational 2lectricit7 Polic7 .12P/ *tre**e* the need
'or reg$lator7 certaint7 thro$gh inde"endent reg$lation .+53, 200Fa/:
NO.the nee# /or regulator8 certaint8 9ase# on in#e1en#ence o/
the regulator8 commissions an# trans1arenc8 in their
/unctioning to generate investorHs con/i#ence.7
#$ch "olic7 *tate&ent* need to %e tran*lated into a "olitical re*olAe to di*tance the
goAern&ent 'ro& the *election "roce** o' reg$lator* and to "roAide 'inancial
inde"endence to the reg$lator7 in*tit$tion*6 3nAe*tor* in "riAati*ed di*tri%$tion $tilitie*
are eG"o*ed to a reg$lator7 ri*k i' a &edi$&-ter& road &a" to "er'or&ance *tandard* and
tari''* cannot %e co&&itted $nder the "reAailing reg$lator7 regi&e6 The ado"tion o' a
&$lti-7ear tari'' 'ra&e)ork )ill "roAide *o&e co&'ort to inAe*tor* and )ill al*o en*$re a
%etter re*"on*e to '$t$re diAe*tit$re o' *tate o)ned di*tri%$tion $tilitie*6 ,i*tri%$tion
re'or&*, targeted to i&"roAe the "er'or&ance o' di*tri%$tion $tilitie*, al*o alleAiate the
ri*k "erce"tion o' inAe*tor*6 #trengthening o' the Accelerated Po)er ,eAelo"&ent and
Re'or&* Progra& .AP,RP/ )ith a &ile*tone %a*ed di*%$r*e&ent and contracting
re'or&* to en*$re e''icient $tili?ation o' '$nd* )o$ld hel" in thi* direction6
Per'or&ance o' ,i*tri%$tion 0tilitie*
1B2
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
The "oor 'inancial and o"erational "er'or&ance o' di*tri%$tion $tilitie* re&ain* a ke7
concern 'or inAe*tor* in "o)er generation6 A "ha*ed o"en acce** regi&e 'or direct *ale to
c$*to&er* i* not eG"ected to "roAide a *$%*tantial &arket 'or ne) generation a**et*
i&&ediatel7 d$e to cro**-*$%*id7 *$rcharge6 A *igni'icant "art o' de&and gro)th i*
eG"ected to co&e )ithin the net)ork o' di*tri%$tion $tilitie*, )hich re&ain the ke7
c$*to&er* 'or 3PP*6 Fro& the recent eG"erience, it i* eAident that "riAati*ation o'
di*tri%$tion $tilitie* re&ain* $nattractiAe to inAe*tor* and de*ire* a lot o' a "olitical
co$rage6
,$e to a lack o' reg$lator7 inde"endence, the "olitical econo&7 o' electricit7 "rice*
re&ain* a ke7 concern6 3nAe*tor* are $nlikel7 to %e intere*ted i' the7 are $na%le to
generate *$''icient ca*h 'lo)* d$e to lo) tari''* and "a7&ent ri*k*6 Ti&ing and
*e($encing o' "riAati*ation, a "erceiAed "anacea 'or all the ill* o' the "$%lic *ector, i*
critical to the *$cce** o' "riAati*ation it*el' and the re'or&* "rogra& .Ro*en?)eig and
<oll, 199!/6 3' eGi*ting *tate $tilitie* are a%le to red$ce technical and 'inancial lo**e*, and
i&"roAe recoAerie*, a "riAati*ation "rogra& )o$ld %e &ore attractiAe to inAe*tor*6 Thi*
)o$ld al*o hel" to achieAe the $lti&ate goal o' a red$ction in *hortage* thro$gh
inAe*t&ent and an i&"roAe&ent in e''icienc7 in the *ector in the long-r$n6 A,B .2000/
reco&&end* that reg$lator* *ho$ld "re"are the di*tri%$tion $tilitie* 'or "riAati*ation %7
red$ction in *$%*idie* and cro**-*$%*idie*6 2arl7 "riAati*ation o' the "oorl7 "er'or&ing
di*tri%$tion $tilitie*, )itho$t a&"le co&&ercial *"ace, &a7 not lead to *"eed7 recoAer76
Thi* &ake* the "roce** o' t$rnaro$nd le** "o"$lar and *lo)* do)n "riAati*ation e''ort in
other *tate*6 +reater co&&ercial a$tono&7 )ith ade($ate incentiAe *tr$ct$re and
inde"endence 'ro& "olitical inter'erence are de*ira%le to i&"roAe the health o' the
di*tri%$tion *eg&ent6 5ne &a7 arg$e that a t$rnaro$nd o' cor"orati*ed di*tri%$tion
$tilitie* co$ld o%Aiate the need 'or "riAati*ation6 Ho)eAer, the ri*k o' 'alling %ack into an
ine''icienc7 tra" and the 'ear o' "olitical interAention* )o$ld contin$e to linger $nder the
"$%lic o)ner*hi"6 Thi* )o$ld re($ire t$rning %ack to increa*ed *$%*idie*, taking
re*o$rce* a)a7 'ro& other *ocial *ector* that re($ire the goAern&entI* attention6 A* i*
1B
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
eAident 'ro& the eG"erience in 5ri**a and ,elhi, "riAati*ation &a7 not %e a "anacea to
all the ill* o' the "o)er *ector a* it i* not i&&$ne to "olitical interAentioni*& and
reg$lator7 $ncertaint76 0nle** the*e i**$e* are addre**ed, a "riAati*ation eGerci*e in the
'$t$re &a7 not 'ind &an7 taker* 'ro& the "riAate *ector6
A* &entioned a%oAe, a "oor *tate o' di*tri%$tion $tilitie* di*co$rage* inAe*t&ent %7 the
3PP*6 F$rther, a lack o' co$nter g$arantee* and li&ited e*cro)a%ilit7 o' di*tri%$tion
$tilitie* re($ire* $rgent attention to i&"roAe the ca*h 'lo)6 Thi* )o$ld &ean that tari''*
)o$ld need to %e rationali*ed, i6e6, increa*ed, 'or *$%*idi?ed categorie*6 The "olitical
*7*te& cannot ho"e to kee" the high gro$nd on *$%*idi?ed tari''* 'or a large "olitical %a*e
and al*o tr7 to 'ill the )idening "o)er *$""l7 ga" thro$gh enhanced "riAate and
*$*taina%le "$%lic inAe*t&ent6 Pha*ed direct acce** to large con*$&er* al*o highlight* the
$rgenc7 to i&"roAe the o"erational e''icienc7 and 'inancial "er'or&ance o' *tate $tilitie*6
Thi* &a7 re*$lt in lo** o' l$cratiAe c$*to&er*, )hich traditionall7 cro**-*$%*idi*e other
"oliticall7 *en*itiAe con*$&er categorie* and hence '$rther aggraAate the 'inancial
*it$ation6
1BB
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
C($C%2S'($S
C($C%2S'($S
The electricit7 *$""l7 ha* %een in the "$%lic do&ain in &o*t o' the deAelo"ing co$ntrie*6
0nder "$%lic o)ner*hi", the *ector ha* not %een a%le to catch $" )ith the gro)ing
de&and 'or electricit76 The o"erational ine''icienc7 and 'inancial lo**e* o'ten lead to
"oor ($alit7 o' *$""l7 and $nderinAe*t&ent6 A )aAe o' re'or&* ha* *)e"t thro$gh a
n$&%er o' deAelo"ing co$ntrie*6 The*e re'or&* )ere "ri&aril7 targeted to i&"roAe the
"er'or&ance o' the *tate o)ned co&"anie* and to "roAide a cond$ciAe at&o*"here 'or
"riAate inAe*t&ent in the *ector6 The er*t)hile Aerticall7 integrated #2B* in 3ndia haAe
%een riddled )ith ine''iciencie* d$e to a lack o' acco$nta%ilit7 and ad&ini*tratiAe
%ottleneck*6 Re'or&* in the 3ndian "o)er *ector )ere initiated to re*tr$ct$re the #2B*
and to *et $" inde"endent reg$lator7 in*tit$tion*6 The 2lectricit7 Act 200 led to
dee"ening o' the re'or& "roce** %7 ena%ling co&"etition in the )hole*ale electricit7
&arket and retail electricit7 *$""l7, in "ha*e*6 Thirteen #2B* haAe *o 'ar $n%$ndled into
*e"arate generation, tran*&i**ion and di*tri%$tion co&"anie*6 Beginning )ith the
e*ta%li*h&ent o' an inde"endent reg$lator7 co&&i**ion in 5ri**a in 1996, the #2R4*
haAe %een *et $" in all *tate*6 #o&e o' the *&aller *tate* in the 1orth 2a*t haAe
e*ta%li*hed a Eoint 2lectricit7 Reg$lator7 4o&&i**ion6 The "roce** o' tari''
deter&ination ha* %eco&e &ore tran*"arent and li&ited tari'' rationali*ation ha* %een
$ndertaken again*t con*$&er o""o*ition and "olitical &eddling6
The e&erging co&"etition in the %$lk "o)er &arket and "ha*ed direct acce** to large
con*$&er* i* ai&ed at red$cing the ri*k* a**ociated )ith *ale* to 'inanciall7 )eak *tate
$tilitie*6 The "olic7 and reg$lator7 deAelo"&ent* are "ro&i*ing, %$t &ore need* to %e
done to i&"roAe the "er'or&ance o' di*tri%$tion $tilitie*6 A&ong*t other 'actor*, the
a$tono&7 to &anage the*e $tilitie* in a co&&ercial &anner re&ain* a ke7 i**$e6 3n the
long-r$n, the *tateI* o%HectiAe* are %e*t *erAed %7 n$rt$ring a 'inanciall7 *$*taina%le
1BF
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
*ector that can i&"roAe acce** 'or "oor and r$ral con*$&er*6 Thi* re*earch $ndertook a
reAie) o' the "olic7 and reg$lator7 deAelo"&ent* in the 3ndian "o)er *ector6 A reAie) o'
the literat$re and a co&"aratiAe "olic7 anal7*i* hel"ed $* to $nraAel *o&e o' the le**on*
to %e learned 'or the "roce** o' re'or& in deAelo"ing co$ntrie* in general6 The initial
"ha*e o' "o)er *ector re'or& in 3ndia allo)ed co&&erciall7-oriented 3PP* to *ell "o)er
to 'inanciall7 )eak #2B*, )hich do not rel7 on *o$nd co&&ercial "rinci"le*6 Thi*
&arriage o' conAenience i* not *$*taina%le6 The initial "ha*e o' re'or&* in deAelo"ing
co$ntrie* *ho$ld %e ai&ed to re*tr$ct$re the *ector and to *et $" an inde"endent reg$lator6
A* "riAate "artici"ation gro)*, it )o$ld %e *$ita%le to introd$ce co&"etition in the *ector6
Thi* )o$ld not onl7 hel" lo)er the co*t o' "o)er "$rcha*e, it )o$ld al*o "roAide greater
incentiAe 'or "er'or&ance i&"roAe&ent6 The eG"erience o' "riAate *ector inAe*t&ent in
:atin A&erican co$ntrie* relied on the introd$ction o' co&&ercial intere*t in the %$lk
"o)er &arket %7 inAiting 3PP* a* )ell a* introd$cing co&&ercial "rinci"le* at the end o'
%$7er $tilitie* thro$gh their diAe*tit$re6 The eG"erience in 2a*t A*ia and :atin A&erica
*$gge*t* that &acroecono&ic *ta%ilit7 re&ain* a ke7 to attracting *$*taina%le and
increa*ed inAe*t&ent in the in'ra*tr$ct$re *ector*6 3ndia contin$e* to de&on*trate
&acroecono&ic *ta%ilit7 along )ith "r$dent c$rrenc7 &anage&ent6 F$t$re gro)th
"ro*"ect* in the "o)er *ector hold *$%*tantial "otential 'or "riAate inAe*t&ent6 Ho)eAer,
the 'inancial "er'or&ance o' the *tate o)ned di*tri%$tion $tilitie* re&ain* a ke7 concern
'or inAe*tor*6 A "o*itiAe o$tco&e o' eGi*ting di*tri%$tion "riAati*ation "rogra&* )o$ld
g$ide *$ch '$t$re "lan*, )hich re&ain "oliticall7 *en*itiAe6 The reg$lator7 challenge i* to
"roAide incentiAe* 'or i&"roAe&ent in technical e''icienc7 and 'inancial "er'or&ance6
The $naAaila%ilit7 o' *oAereign g$arantee* can %e ade($atel7 addre**ed i' *tate $tilitie*
%eco&e Aia%le thro$gh greater co&&erciali*ation, i' not "riAati*ation6 3na%ilit7 o' the
do&e*tic ca"ital &arket to "roAide long-ter& de%t 'or the "o)er *ector need* to %e
ade($atel7 addre**ed %7 enco$raging contract$al *aAing thro$gh li'e in*$rance and
"en*ion '$nd*, and channeli*ing the*e 'or the "o)er *ector6 #ec$riti*ation o' "roHect loan*
a'ter the con*tr$ction "eriod and deAelo"&ent o' *econdar7 %ond &arket )o$ld hel"
1B6
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
garner '$nd* 'or inAe*t&ent in the *ector6 The long-ter& intere*t o' the con*$&er* can
onl7 %e *erAed i' rea*ona%l7 "riced electricit7 i* aAaila%le oAer the long-r$n6 Political
intere*t* )o$ld %e*t %e *erAed %7 de"olitici*ing tari''*, )hich )o$ld %e %ene'icial to
con*$&er* in the long-ter& thro$gh i&"roAed ($alit7 and relia%ilit7 o' *$""l76 +iAen the
o%HectiAe to electri'7 all Aillage* %7 2010 and to do$%le the generating ca"acit7 in the
co$ntr7 %7 2012, the need to i&"roAe the "olic7 enAiron&ent and *trengthen the
reg$lator7 'ra&e)ork cannot %e ignored6
1B!
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;
A!N"#$
Proected !unding Re"uirement #or the Power Sector #or $ % $& !i'e()ear Plan
$ Plan $& Plan
"escription #tate 4entral PriAate #tate 4entral PriAate Total
%unds required 1!!000 1!;000 BF000 219000 19F000 ;6000 900000
(A) Equity
Required
F100 FB00 1F00 6F!00 F;F00 2F;00 2!0000
(B) Equity
Available
1. Promoters
Including FDI
0 0 F000 0 0 9F00 1BF00
. Internal
Resources
F000 19000 1000 20000 1;000 2000 6F000
3. Govt. Support
61 #tate +oAt6 10000 0 0 10000 0 0 20000
62 4entral +oAt6 Y10000 2;000 0 10000 ;000 0 ;6000
6 P-+D @ 9$tir E7oti
+rant*
6000 0 9000 1F000
4 6 T5TA: .B/ 1000 B!000 6000 B9000 F6000 11F00 200F00
,6 2($it7 +AP .A-4/ 22100 6B00 !F00 16!00 2F00 1B00 69F00
26 ,e%t Re($ired 12900 12B600 1F00 1F00 16F00 60200 60000
F. De9t Availa9le
1. Domestic
161 ,irect &arketing
%orro)ing
6000 ;600 6000 1F000 10000 !000 F2600
162 Bank* and A3F3* B0900 90000 1100 2900 !;F00 1;200 2!0000
16 PF4 20000 9000 FB00 BF000 2!000 20000 126B00
16F 4entral +oAt6 Y10000 0 0 10000 0 0 20000
. International
261 -$ltilateral credit* 10000 F000 0 10000 F000 0 0000
262 24A@24B@#7n6 :oan F000 12000 !000 ;000 12000 !000 F1000
.+/ Total .F/ 12900 12B600 1F00 1F00 16F00 60200 60000
.H/ ,e%t6 +AP .2-+/ 0 0 0 0 0 0
(I) !otal "AP (D#$) 22100 6B00 !F00 16!00 2F00 1B00 69F00
1B;
#82TA 90-AR3 A::3A142 B-#4H55: #3P- 200;