CCEA nod for NTPC-Railways joint venture

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Hindu Businessline,

New Delhi Feb. 2 The Cabinet Committee on Economic Affairs (CCEA) has
approved a joint venture between NTPC Ltd and the Indian Railways for
setting up a Rs 5,352-crore thermal power plant at Nabinagar in Bihar
to meet the requirements of the rail network across the country.

The joint venture company, Bharatiya Rail Bijlee Company, will execute
the 1000 MW plant with NTPC holding 74 per cent equity while the
Railways the balance.

"Since the project capacity is 1000 MW and power will be supplied to
more than one State, the financial concessions and benefits available
to mega projects by way of custom and excise duty exemption, will be
extended," the Finance Minister, Mr P. Chidambaram, said after the
meeting.

The company will have a seed capital of Rs 10 crore and an authorised
capital of Rs 1,605.75 crore. NTPC will make an investment of Rs
1,188.26 crore while the Railways will chip in with Rs 417.50 crore
toward the equity.

Cost of power

Mr Chidambaram said the cost of power would work out to about Rs 2.51
per unit and 10 per cent power would be given to Bihar. "However, if
the project is accorded mega status, then the cost of power would go
down to Rs 2.39 per unit," he added. The Railways currently shells out
Rs 4.22 per unit (average all-India) for its traction needs. The joint
venture company would be headquartered in Delhi and will be managed by
NTPC, whose nominee will be heading the new entity.