After a long gap of 15 quarters or close to four years, Kolkata-based generation utility Damodar Valley Corporation (DVC) reported ₹19-crore profit in the January-March quarter of 2018, riding on improved demand for power and high open market tariff.

For the whole year, however, its losses were marginally down from ₹905 crore in 2016-17 to ₹870 crore in 2017-18. Power sales was up three per cent to ₹14,955 core. Average plant load factor was up from 52 per cent to 56 per cent.

According to acting Chairman PK Mukhopadhyay, plant availability increased sharply during the last three months from 66 per cent in February to 71 per cent in April, indicating good summer demand potential. Electricity sales in the open market were up three times last year. He was addressing a press conference here on Friday.

Power sales may remain stable or better this fiscal due to the two contracts of 300 MW won by DVC for cross border power sales to Bangladesh. This includes one long-term contract for supplying 300 MW power a day. The other one is short term in nature. Supplies are slated to begin from June 1. India currently supplies 660 MW to Bangladesh through Bheramara border (500 MW) in Mursidabad and Suryamaninagar (160 MW) in Tripura. Beginning June 1, capacity of the Bheramara transmission line would be doubled to 1000 MW. A new interface may be opened through South Bengal to take the total supplies to Dhaka to 1260 MW.

Buoyed by improved results, the organisation decided against hiving off the 2X600MW Raghunathpur thermal power plant to a 74 per cent joint venture of Neyveli Lignite Corporation. “We are not hiving off Raghunathpur thermal project,” Mukhopadhyay said.

DVC undertook an over ambitious 5200-MW capacity addition programme, in the last decade. The projects suffered huge cost overrun due to shoddy implementation. Raghunathpur, in particular, was years behind schedule. Meanwhile, the huge loan burden dragged DVC to the red.

Raghunathpur project

As in 2016-17, DVC had a debt stock of ₹25,000 crore requiring close to ₹1,000 crore interest payment. The sale of Raghunathpur project would have helped the organisation to cut total borrowings by ₹5,000 crore. The sale was in limbo for nearly a year due to delay on the part of West Bengal government, which is stakeholder in DVC, to grant approval.

Mukhopadhyay said the plant would be retained for value maximisation. According to him, once the plant would be connected by rail, by January next year, its variable cost of generation will be “cheapest” in West Bengal. He has also announced a projected profit of ₹552 crore in 2017-18.

Meanwhile, DVC’s cash earnings suffered due to non-payment of dues from Jharkhand (also a stakeholder in DVC) which was the first state to join UDAY (Ujwal Discom Assurance Yojana) in November 2015 and cleared a historic debt of ₹4,770 crore.

In two years, Jharkhand piled up fresh dues of ₹2,000 crore, with 98 per cent of the current bills being realised.

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