Railways, NTPC to sign deal for setting up power plant

New Delhi, Nov 5 (UNI) In a move aimed at reducing its whopping expenses of around Rs 400 crore on purchasing electricity from state electricity boards, the Railways will sign a deal with the National Thermal Power Corporation (NTPC) to set up a 1,000 MW captive power plant at Nabinagar in Bihar's Aurangabad district.

The venture agreement, to be signed here tomorrow in the presence of Railway Minister Lalu Prasad and Power Minister Sushil Kumar Shinde, provides for setting up the power plant -- christened the Bharatiya Rail Bijlee Company Ltd -- at a cost of Rs 5,352 crore.

The NTPC and Railways would hold 74 per cent and 26 per cent equity respectively in the project.

The power plant would be spread over an area of 1,700 acres and the project is to be executed within four years.

''It is going to be a captive power plant of Railways, and is aimed at giving it cheaper power for its traction purpose,'' he said.

The official said Railways have around 18,000 km of tracks under electric traction and require 2,000 MW of electricity.

Currently, the average cost of electricity bought by Railways is Rs 4.28 per unit.

''Once this plant becomes operational, the average levelised cost of generation will be pegged to Rs 2.13 per unit. After paying the wheeling and transmission charges, the Railways' traction tariff would be between Rs 3.38 and Rs 3.63 per unit, resulting in savings of more than Rs 400 crore a year.'' More importantly, it will bring down the operating expenses by 1 to 2 per cent in the process.

During the fiscal 2006-07, Railways ad to shell out Rs 5,707 crore for consuming 13.33 billion units of electricity. Of this, 11.03 billion units were used for traction purposes alone.

The official said Railways use electrified routes for carrying out 64 per cent of its freight business and 48 per cent of its passenger traffic.

Giving details of the project, he said a Cabinet Note with regard to the setting up of proposed plant was sent to the Power Ministry in February last year for further processing for taking approval from the Cabinet Committee on Economic Affairs (CCEA).

The Power Ministry sent the draft Cabinet Note to the Finance Ministry, which subsequently approved it.

UNI