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SUMMER TRAINING REPORT ON “Financial Analysis & Comparison Of UPRVUNL” Submitted in partial fulfillment of the requirement for the award of degree of Master of Business Administration From Gautam Buddh Technical University, Lucknow Submitted by ANKIT MITTAL Roll no: 1212470025 MBA (Batch 2012-14), 3 rd Semester Under The Guidance Of Mr. DEVENDRA KUMAR SHUKLA Accounts Officer CPAD OBRA ‘A’TPS

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Page 1: Ankit Project

SUMMER TRAINING REPORTON

“Financial Analysis & Comparison Of UPRVUNL”

Submitted in partial fulfillment of the requirement for the award of degree of

Master of Business AdministrationFrom

Gautam Buddh Technical University, Lucknow

Submitted by

ANKIT MITTALRoll no: 1212470025

MBA (Batch 2012-14), 3rd Semester

Under The Guidance Of

Mr. DEVENDRA KUMAR SHUKLAAccounts Officer

CPAD OBRA ‘A’TPS

INSTITUTE OF CO-OPERATIVE & CORPORATE MANAGEMENT, RESEARCH AND TRAINING

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21/467, RING ROAD, INDIRA NAGAR, LUCKNOW

Acknowledgement

I owe a great many thanks to a great many people who helped and supported me

during the writing of this project. My deepest thanks to Mrs. Pooja Sharma the

Guide of the project for guiding and correcting various documents of mine with

attention and care. She had taken pain to go through the project and make necessary

correction as and when needed. I express my thanks to the Principal of my college

Prof. AJAY PRAKASH Sir for extending his support. My deep sense of gratitude to

Mr. DEVENDRA KUMAR SHUKLA, Account Officer CENTRAL PAYMENT

AND ACCOUNT DIVISION Obra Thermal Power Station ‘A’ for his able support and

guidance.

I am specially thanking full for Mr. S.P. SAXENA Sir (DY. CHIEF ACCOUNTS

OFFICER, CPAD OBRA ‘A’TPS) for his grateful support. Thanks and appreciation

to the helpful people CPAD OBRA ‘A’TPS, for their support. I would also thank my

Institution and my faculty members without whom this project would have been a

distant reality. I also extend my heartfelt thanks to my family and well wishers.

ANKIT MITTAL

1212470025

III Semester

Page 3: Ankit Project

DECLARATION

I Ankit Mittal, a student of Master of Business Administration (MBA) Programme

hereby declare that the project work entitled Financial Analysis & Comparison Of

UPRVUNL submitted to the from the Institute of Co- operative & Corporate

Management Research and Training, Lucknow, is a record of an original work done

by me under the guidance of Mr. DEVENDRA KUMAR SHUKLA AND Mrs. Pooja

Sharma and the same has never been submitted by the undersigned either in part or in

full to any other University or Institute or published earlier.

This information is true to the best of my knowledge and belief.

ANKIT MITTAL

1212470025

Page 4: Ankit Project

TABLE OF CONTENTS

1. Company profile

2. Objective of study.

3. Introduction of topic.

4. Research methodology

5. Data Analysis and interpretation.

6. Results and Findings

7. Suggestion/ Recommendations

8. Conclusions

9. Limitation of study.

10. Appendix/ Annexure

11. Bibliography

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INDUSTRY PROFILE

Page 6: Ankit Project

INTRODUCTION

The electricity sector in India had an installed capacity of 225.133 GW as of May

2013, the world's fifth largest. Captive power plants generate an additional 34.444

GW. Non Renewable Power Plants constitute 87.55% of the installed capacity, and

Renewable Power Plants constitute the remaining 12.45% of total installed Capacity.

India generated 855 BU (855 000 MU i.e. 855 Two) electricity during 2011–12 fiscal.

In terms of fuel, coal-fired plants account for 57% of India's installed electricity

capacity, compared to South Africa's 92%; China's 77%; and Australia's 76%. After

coal, renewal hydropower accounts for 19%, renewable energy for 12% and natural

gas for about 9%.

In December 2011, over 300 million Indian citizens had no access to electricity. Over

one third of India's rural population lacked electricity, as did 6% of the urban

population. Of those who did have access to electricity in India, the supply was

intermittent and unreliable. In 2010, blackouts and power shedding interrupted

irrigation and manufacturing across the country.

The per capita average annual domestic electricity consumption in India in 2009 was

96 kWh in rural areas and 288 kWh in urban areas for those with access to electricity,

in contrast to the worldwide per capita annual average of 2600 kWh and 6200 kWh in

the European Union. India's total domestic, agricultural and industrial per capita

energy consumption estimates vary depending on the source. Two sources place it

between 400 to 700 kWh in 2008–2009. As of January 2012, one report found the per

capita total consumption in India to be 778 kWh.

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India currently suffers from a major shortage of electricity generation capacity, even

though it is the world's fourth largest energy consumer after United States, China and

Russia. The International Energy Agency estimates India needs an investment of at

least $135 billion to provide universal access of electricity to its population.

The International Energy Agency estimates India will add between 600 GW to 1200

GW of additional new power generation capacity before 2050. This added new

capacity is equivalent to the 740 GW of total power generation capacity of European

Union (EU-27) in 2005. The technologies and fuel sources India adopts, as it adds this

electricity generation capacity, may make significant impact to global resource usage

and environmental issues.

India's electricity sector is amongst the world's most active players in renewable

energy utilization, especially wind energy. As of December 2011, India had an

installed capacity of about 28 GW of renewal technologies-based electricity,

exceeding the total installed electricity capacity in Austria by all technologies.

India's network losses exceeded 32% in 2010 including non-technical losses,

compared to world average of less than 15%. Both technical and non-technical factors

contribute to these losses, but quantifying their proportions is difficult. But the

Government pegs the national T&D losses at around 24% for the year 2011 & has set

a target of reducing it to 17.1% by 2017 & to 14.1% by 2022. Some experts estimate

that technical losses are about 15% to 20%, a high proportion of non‐technical losses

are caused by illegal tapping of lines, but faulty electric meters that underestimate

actual consumption also contribute to reduce payment collection. A case study in

Kerala estimated that replacing faulty meters could reduce distribution losses from

34% to 29%.

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Key implementation challenges for India's electricity sector include new project

management and execution, ensuring availability of fuel quantities and qualities, lack

of initiative to develop large coal and natural gas resources present in India, land

acquisition, environmental clearances at state and central government level, and

training of skilled manpower to prevent talent shortages for operating latest

technology plants.

History

The first demonstration of electric light in Calcutta was conducted on 24 July 1879 by

P W Fleury & Co. On 7 January 1897, Kilburn & Co secured the Calcutta electric

lighting license as agents of the Indian Electric Co, which was registered in London

on 15 January 1897. A month later, the company was renamed the Calcutta Electric

Supply Corporation. The control of the company was transferred from London to

Calcutta only in 1970. Enthused by the success of electricity in Calcutta, power was

thereafter introduced in Bombay. Mumbai saw electric lighting demonstration for the

first time in 1882 at Crawford Market, and Bombay Electric Supply & Tramways

Company (B.E.S.T.) set up a generating station in 1905 to provide electricity for the

tramway. The first hydroelectric installation in India was installed near a tea estate at

Sidrapong for the Darjeeling Municipality in 1897. The first electric train ran between

Bombay's Victoria Terminus and Kurla along the Harbour Line, in 1925. In 1931,

electrification of the meter gauge track between Madras Beach and Tambaram was

started.

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Demand

Of the 1.4 billion people of the world who have no access to electricity in the world,

India accounts for over 300 million.

Some 800 million Indians use traditional fuels – fuel wood, agricultural waste and

biomass cakes – for cooking and general heating needs. These traditional fuels are

burnt in cook stoves, known as chulah or chulha in some parts of India. Traditional

fuel is inefficient source of energy, it’s burning releases high levels of smoke, PM10

particulate matter, NOX, SOX, PAHs, polyaromatics, formaldehyde, carbon

monoxide and other air pollutants. Some reports, including one by the World Health

Organization, claim 300,000 to 400,000 people in India die of indoor air pollution and

carbon monoxide poisoning every year because of biomass burning and use of

chullahs. Traditional fuel burning in conventional cook stoves releases unnecessarily

large amounts of pollutants, between 5 to 15 times higher than industrial combustion

of coal, thereby affecting outdoor air quality, haze and smog, chronic health problems,

damage to forests, ecosystems and global climate. Burning of biomass and firewood

will not stop, these reports claim, unless electricity or clean burning fuel and

combustion technologies become reliably available and widely adopted in rural and

urban India. The growth of electricity sector in India may help find a sustainable

alternative to traditional fuel burning.

In addition to air pollution problems, a 2007 study finds that discharge of untreated

sewage is single most important cause for pollution of surface and ground water in

India. There is a large gap between generation and treatment of domestic wastewater

in India. The problem is not only that India lacks sufficient treatment capacity but also

that the sewage treatment plants that exist do not operate and are not maintained.

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Majority of the government-owned sewage treatment plants remain closed most of the

time in part because of the lack of reliable electricity supply to operate the plants. The

wastewater generated in these areas normally percolates in the soil or evaporates. The

uncollected wastes accumulate in the urban areas because unhygienic conditions,

release heavy metals and pollutants that leaches to surface and groundwater. Almost

all rivers, lakes and water bodies are severely polluted in India. Water pollution also

adversely impacts river, wetland and ocean life. Reliable generation and supply of

electricity is essential for addressing India's water pollution and associated

environmental issues.

Other drivers for India's electricity sector are its rapidly growing economy, rising

exports, improving infrastructure and increasing household incomes.

Demand trends

As in previous years, during the year 2010–11, demand for electricity in India far

outstripped availability, both in terms of base load energy and peak availability. Base

load requirement was 861,591 (MU) against availability of 788,355 MU, an 8.5%

deficit. During peak loads, the demand was for 122 GW against availability of 110

GW, a 9.8% shortfall.

In a May 2011 report, India's Central Electricity Authority anticipated, for 2011–12-

year, a base load energy deficit and peaking shortage to be 10.3% and 12.9%

respectively. The peaking shortage would prevail in all regions of the country, varying

from 5.9% in the North-Eastern region to 14.5% in the Southern Region. India also

expects all regions to face energy shortage varying from 0.3% in the North-Eastern

region to 11.0% in the Western region. India's Central Electricity Authority expects a

surplus output in some of the states of Northern India, those with predominantly

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hydropower capacity, but only during the monsoon months. In these states, shortage

conditions would prevail during winter season. According to this report, the five states

with largest power demand and availability, as of May 2011, were Maharashtra,

Andhra Pradesh, Tamil Nadu, Uttar Pradesh and Gujarat.

In late 2011 newspaper articles, Gujarat was declared a power surplus state, with

about 2–3 GW more power available than its internal demand. The state was

expecting more capacity to become available. It was expecting to find customers, sell

excess capacity to meet power demand in other states of India, thereby generate

revenues for the state.

Despite an ambitious rural electrification programme, some 400 million Indians lose

electricity access during blackouts. While 80% of Indian villages have at least an

electricity line, just 52.5% of rural households have access to electricity. In urban

areas, the access to electricity is 93.1% in 2008. The overall electrification rate in

India is 64.5% while 35.5% of the population still lives without access to electricity.

According to a sample of 97,882 households in 2002, electricity was the main source

of lighting for 53% of rural households compared to 36% in 1993.

The 17th electric power survey of India report claims:

Over 2010–11, India's industrial demand accounted for 35% of electrical

power requirement, domestic household use accounted for 28%, agriculture

21%, commercial 9%, public lighting and other miscellaneous applications

accounted for the rest.

The electrical energy demand for 2016–17 is expected to be at least 1392 Tera

Watt Hours, with a peak electric demand of 218 GW.

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The electrical energy demand for 2021–22 is expected to be at least 1915 Tera

Watt Hours, with a peak electric demand of 298 GW.

If current average transmission and distribution average losses remain same (32%),

India needs to add about 135 GW of power generation capacity, before 2017, to

satisfy the projected demand after losses.

McKinsey claims that India's demand for electricity may cross 300 GW, earlier than

most estimates. To explain their estimates, they point to four reasons:

India's manufacturing sector is likely to grow faster than in the past

Domestic demand will increase more rapidly as the quality of life for more

Indians improve

About 125,000 villages are likely to get connected to India's electricity grid

Currently blackouts and load shedding artificially suppresses demand; this

demand will be sought as revenue potential by power distribution companies

A demand of 300GW will require about 400 GW of installed capacity, McKinsey

notes. The extra capacity is necessary to account for plant availability, infrastructure

maintenance, spinning reserve and losses.

In 2010, electricity losses in India during transmission and distribution were about

24%, while losses because of consumer theft or billing deficiencies added another 10–

15%.

According to two studies published in 2004, theft of electricity in India amounted to a

nationwide loss of $4.5 billion. This led several states of India to enact and implement

regulatory and institutional framework; develop a new industry and market structure;

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and privatize distribution. The state of Andhra Pradesh, for example, enacted an

electricity reform law; unbundled the utility into one generation, one transmission,

and four distribution and supply companies; and established an independent

regulatory commission responsible for licensing, setting tariffs, and promoting

efficiency and competition. Some state governments amended the Indian Electricity

Act of 1910 to make electricity theft a cognizable offence and impose stringent

penalties. A separate law, unprecedented in India, provided for mandatory

imprisonment and penalties for offenders, allowed constitution of special courts and

tribunals for speedy trial, and recognized collusion by utility staff as a criminal

offence. The state government made advance preparations and constituted special

courts and appellate tribunals as soon as the new law came into force. High quality

metering and enhanced audit information flow was implemented. Such campaigns

have made a big difference in the Indian utilities’ bottom line. Monthly billing has

increased substantially, and the collection rate reached more than 98%. Transmission

and distribution losses were reduced by 8%.

Power cuts are common throughout India and the consequent failure to satisfy the

demand for electricity has adversely effected India's economic growth.

Electricity ConsumptionThe Per capita Consumption (kWh) in 2009–10 was as follows:

StatePer capita Consumption(kWh)

Goa 2004.77Puducherry 1864.5Punjab 1663.01Gujarat 1558Haryana 1491.37Delhi 1447.72

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Chandigarh 1238.51Tamil Nadu 1210.81Himachal Pradesh 1144.94Andhra Pradesh 1013.74Jammu & Kashmir 968.47Rajasthan 811.12Uttar Pradesh 386.93Uttarakhand 930.41Madhya Pradesh 618.1Maharashtra 1054.1Karnataka 855Kerala 536.78Lakshadweep 428.81Bihar 117.48Jharkhand 750.46Orissa 837.55West Bengal 515.08Andaman and Nicobar Islands 506.13Sikkim 845.4Assam 209.2Manipur 207.15Meghalaya 613.36Nagaland 242.39Tripura 253.78Arunachal Pradesh 503.27Mizoram 429.31

Total 43676.73

As many as 18 power plants in the country are faced with critical level of coal

shortage, according to minister of State for Power, K C Venugopal.

Of the 89 thermal power projects being monitored, 34 had fuel (coal) stock less than

seven days and 25 of these had less than four days stock, he said while speaking in the

Rajya Sabha (the upper house of Parliament).

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"None of the power utilities in the country has reported any of their thermal power

stations in stuck for want of coal although, inadequate availability of coal vis-a-vis

requirement has affected electricity generation in some of the power plants," he said.

Power utilities, he said, have reported a generation loss of 8.7 billion units in 2011-12

(up to February, 2012) due to shortage of coal.

Listing steps being taken by the government to mitigate shortage of coal for thermal

power plants in the country, he said Coal India is being asked to enhance coal

production while power utilities have been advised to import coal to bridge domestic

supply deficit.

As many as 11 plants of state-owned NTPC lost 7.8 billion units because of shortage

of coal during current fiscal. Other utilities that lost on generation of electricity

included ones in Madhya Pradesh, Maharashtra and Andhra Pradesh, he added.

BSE Power index fell 2.2 per cent while BSE Sensex fell over 1 per cent.

The budget announced cuts in import duties on coal.

The basic custom duty on steam coal was cut to zero from 5 per cent with

countervailing duty reduced to 1 per cent from 5 per cent for fiscal 2012-13 or 2013-

14.

Analysts say that the effective reduction in import coal cost is close to 9 per cent. In

2012-13, India is expected to import steam coal of about 60 million metric tonne.

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Generation

Power development in India was first started in 1897 in Darjeeling, followed by

commissioning of a hydropower station at Sivasamudram in Karnataka during 1902.

India's electricity generation capacity additions from 1950 to 1985 were very low

when compared to developed nations. Since 1990, India has been one of the fastest

growing markets for new electricity generation capacity.

The country's annual electricity generation capacity has increased in last 20 years by

about 130 GW, from about 66 GW in 1991to over 100 GW in 2001, to over 199 GW

in 2012. India's Power Finance Corporation Limited projects that current and

approved electricity capacity addition projects in India are expected to add about 100

GW of installed capacity between 2012 and 2017. This growth makes India one the

fastest growing markets for electricity infrastructure equipment. India's installed

capacity growth rates are still less than those achieved by China, and short of capacity

needed to ensure universal availability of electricity throughout India by 2017.

State-owned and privately owned companies are significant players in India's

electricity sector, with the private sector growing at a faster rate. India's central

government and state governments jointly regulate electricity sector in India.

As of August 2011, the states and union territories of India with power surplus were

Himachal Pradesh, Sikkim, Tripura, Gujarat, Delhi and Dadra and Nagar Haveli.

Major economic and social drivers for India's push for electricity generation include

India's goal to provide universal access, the need to replace current highly polluting

energy sources in use in India with cleaner energy sources, a rapidly growing

economy, increasing household incomes, limited domestic reserves of fossil fuels and

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the adverse impact on the environment of rapid development in urban and regional

areas.

The table below presents the electricity generation capacity, as well as availability to

India's end user and their demand. The difference between installed capacity and

availability is the transmission, distribution and consumer losses. The gap between

availability and demand is the shortage India is suffering. This shortage in supply

ignores the effects of waiting list of users in rural, urban and industrial customers; it

also ignores the demand gap from India's unreliable electricity supply.

According to India's Ministry of Power, about 14.1 GW of new thermal power plants

under construction are expected to be put in use by December 2012.

In 2010, the five largest power companies in India, by installed capacity, in

decreasing order, were the state-owned NTPC, state-owned NHPC, followed by three

privately owned companies: Tata Power, Reliance Power and Adani Power.

Thermal power

Thermal power plants convert energy rich fuel into electricity and heat. Possible fuels

include coal, natural gas, petroleum products, agricultural waste and domestic trash /

waste. Other sources of fuel include landfill gas and biogases. In some plants, renewal

fuels such as biogas are co-fired with coal.

Coal and lignite accounted for about 57% of India's installed capacity. However, since

wind energy depends on wind speed, and hydropower energy on water levels, thermal

power plants account for over 65% of India's generated electricity. India's electricity

sector consumes about 80% of the coal produced in the country.

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India expects that its projected rapid growth in electricity generation over the next

couple of decades is expected to be largely met by thermal power plants.

Fuel constraints

A large part of Indian coal reserve is similar to Gondwana coal. It is of low calorific

value and high ash content. The iron content is low in India's coal, and toxic trace

element concentrations are negligible. The natural fuel value of Indian coal is poor.

On average, the Indian power plants using India's coal supply consume about 0.7 kg

of coal to generate a kWh, whereas United States thermal power plants consume

about 0.45 kg of coal per kWh. This is because of the difference in the quality of the

coal, as measured by the Gross Calorific Value (GCV). On average, Indian coal has a

GCV of about 4500 Kcal/kg, whereas the quality elsewhere in the world is much

better; for example, in Australia, the GCV is 6500 Kcal/kg approximately.

The high ash content in India's coal affects the thermal power plant's potential

emissions. Therefore, India's Ministry of Environment & Forests has mandated the

use of beneficiated coals whose ash content has been reduced to 34% (or lower) in

power plants in urban, ecologically sensitive and other critically polluted areas, and

ecologically sensitive areas. Coal benefaction industry has rapidly grown in India,

with current capacity topping 90 MT.

Thermal power plants can deploy a wide range of technologies. Some of the major

technologies include:

Steam cycle facilities (most commonly used for large utilities);

Gas turbines (commonly used for moderate sized peaking facilities);

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Cogeneration and combined cycle facility (the combination of gas turbines or

internal combustion engines with heat recovery systems); and

Internal combustion engines (commonly used for small remote sites or stand-

by power generation).

India has an extensive review process, one that includes environment impact

assessment, prior to a thermal power plant being approved for construction and

commissioning. The Ministry of Environment and Forests has published a technical

guidance manual to help project proposers and to prevent environmental pollution in

India from thermal power plants.

Installed thermal power capacity

The installed capacity of Thermal Power in India, as of 31 October 2012, was

140206.18 MW which is 66.99 of total installed capacity.

Current installed base of Coal Based Thermal Power is 120,103.38 MW which

comes to 57.38% of total installed base.

Current installed base of Gas Based Thermal Power is 18,903.05 MW which is

9.03% of total installed capacity.

Current installed base of Oil Based Thermal Power is 1,199.75 MW which is

0.57% of total installed capacity.

The state of Maharashtra is the largest producer of thermal power in the country.

This is a list of states and territories of India by installed capacity of power utilities

with electricity generation mode break-up as of 30-06-2012 and 31-01-2013 with

figures in millions of watts (Megawatts).

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RankState/Union Territory

Total Installed Capacity Total Thermal

— India 205340.26 136436.181 Maharashtra 28310.83 20354.722 Gujarat 23887.54 18841.323 Tamil Nadu 18382.13 8217.334 Andhra Pradesh 16817.13 11771.085 Uttar Pradesh 13682.99 10822.876 Karnataka 13465.44 6355.657 Rajasthan 10247.48 5777.138 Madhya Pradesh 9085.36 5106.159 West Bengal 8507.29 7229.5410 Haryana 7573.25 5987.2111 Punjab 7114.96 3538.4612 Delhi Territory 6932.15 6125.4213 Odisha 6596.33 4332.114 Chhattisgarh 5649.11 5207.44

15Damodar Valley Corporation 5288.86 5095.6

16 Kerala 3827.73 1687.9417 Himachal Pradesh 3714.1 197.1718 Jharkhand 3049.86 2828.8819 Uttarakhand 2556.56 350.2320 Jammu and Kashmir 2356.15 609.5921 Bihar 1833.93 1624.722 Assam 1020.04 559.2123 Goa 418.32 362.4724 Meghalaya 373.62 28.0125 Puducherry Territory 279.66 260.3526 Tripura 265.07 186.6927 Sikkim 206.48 79.128 Arunachal Pradesh 213.76 36.9329 Manipur 157.8 71.3730 Mizoram 138.92 68.1431 Nagaland 103.18 21.1932 NLC 100.17 100.1733 Chandigarh Territory 105.71 45.13

34Dadra and Nagar Haveli Territory 75.38 66.92

35Daman and Diu Territory 44.9 37.52

36Andaman and Nicobar Islands Territory 65.4 60.05

37Lakshadweep Territory 10.72 9.97

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Various Thermal Power Plants located in various parts of INDIA

Name Operator Location State UnitsCapacity MW

Rajghat Power Station IPGCL Rajghat Delhi 2 X 67.5 135Panipat Thermal Power Station I HPGCL Assam Haryana 4 x 110 440Panipat Thermal Power Station II HPGCL Assam Haryana

2 x 210, 2 x 250 920

Faridabad Thermal Power Station HPGCL Faridabad Haryana 1 x 55 55Rajiv Gandhi Thermal Power Station HPGCL Khedar Haryana 1 x 600 600Guru Nanak dev TP PSPCL Bathinda Punjab 4 x 110 440

Guru Hargobind TP PSPCLLehra Mohabbat Punjab

2 x 210, 2 x 250 920

Guru Gobind Singh Super Thermal Power Plant PSPCL Ghanauli Punjab 6 x 210 1260Suratgarh Super Thermal Power Plant RVUNL Suratgarh Rajasthan 6 x 250 1500Kota Super Thermal Power Plant RVUNL Kota Rajasthan

2 x 110, 3 x 210, 2 x 195 1240

Giral Lignite Power Plant RVUNL Thumbli Rajasthan 2 x 125 250Chhabra Thermal Power Plant RVUNL Mothipura Rajasthan 2 x 250 500Obra Thermal Power Station UPRVUNL Obra

Uttar Pradesh

1 x 40, 3 x 94, 5 x 200 1,322.00

Anpara Thermal Power Station UPRVUNL Anpara

Uttar Pradesh

3 x 210, 2 x 500 1630

Panki Thermal Power Station UPRVUNL Panki

Uttar Pradesh 2 x 105 210

Parichha Thermal Power Station UPRVUNL Parichha

Uttar Pradesh

2 x 110, 2 x 210 640

Harduaganj Thermal Power Station UPRVUNL Harduaganj

Uttar Pradesh

1 x 55, 1 x 60, 1 x 105 220

Badarpur Thermal Power Station NTPC Badarpur NCT Delhi

3 x 95, 2 x 210 705

Singrauli Super Thermal Power Station NTPC Shaktinagar

Uttar Pradesh

5 x 200, 2 x 500, 2000

Barsingsar Thermal Power Station NLC Barsingsar Rajasthan 2 x 125 250

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Rihand Thermal Power Station NTPC

Rihand Nagar

Uttar Pradesh 4 x 500 2000

NTPC Dadri NTPC VidyutnagarUttar Pradesh

4 x 210, 2 x 490 1820

Feroj Gandhi Unchahar Thermal Power Plant NTPC Unchahar

Uttar Pradesh 5 x 210 1050

Tanda Thermal Power Plant NTPC Vidyutnagar

Uttar Pradesh 4 x 110 440

Raj west Lignite Power Plant JSW Barmer Rajasthan 8 x 135 135VS Lignite Power Plant KSK Gurha Rajasthan 1 x 125 125Rosa Thermal Power Plant Reliance Rosa

Uttar Pradesh 4 x 300 1200

Ukai Thermal Power Station GSECL Ukai dam Gujarat

2 x 120, 2 x 200, 1 x 210 850

Gandhinagar Thermal Power Station GSECL Gandhinagar Gujarat

2 x 120, 3 x 210 870

Wanakbori Thermal Power Station GSECL Wanakbori Gujarat 7 x 210 1470Sikka Thermal Power Station GSECL Jamnagar Gujarat 2 x 120 240Dhuvaran Thermal Power Station GSECL Khambhat Gujarat 2 x 110 220Kutch Thermal Power Station GSECL Panandhro Gujarat

2 x 70, 2 x 75 290

Surat Thermal Power Station GIPCL Nani Naroli Gujarat 4 x 125 500Akrimota Thermal Power Station GMDC Chher Nani Gujarat 2 x 125 250

Satpura Thermal Power Station MPPGCL Sarni

Madhya Pradesh

5 x 62.5, 1 x 200, 3 x 210 1142.5

Sanjay Gandhi Thermal Power Station MPPGCL Birsinghpur

Madhya Pradesh

4 x 210, 1 x 500 1340

Amarkantak Thermal Power Station MPPGCL Chachai

Madhya Pradesh

2 x 120, 1 x 210 450

Bhawnendra Singh Deo Power Plant CSPGCL Chattisgarh

4 x 50, 2 x 120 440

Dr Shyama Prasad Mukharjee Thermal Power Station CSPGCL Chattisgarh 2 x 250 500Hasdeo Thermal Power Station CSPGCL Chattisgarh 4 x 210 840

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Koradi Thermal Power Station MAHAGENCO Koradi Maharastra

1 x 200, 2 x 210 620

Nashik Thermal Power Station MAHAGENCO Nashik Maharastra 3 x 210 630Bhusawal Thermal Power Station MAHAGENCO Deepnagar Maharastra 2 x 210 420Paras Thermal Power Station MAHAGENCO Vidyutnagar Maharastra 2 x 250 500Parli Thermal Power Station MAHAGENCO

Parli-Vaijnath Maharastra

3 x 210, 2 x 250 1130

Khaperkheda Thermal Power Station MAHAGENCO Kaparkheda Maharastra

4 x 210, 1 x 500 1340

Chandrapur Super Thermal Power Station MAHAGENCO Urjanagar Maharastra

4 x 210, 3 x 500 2340

Vindhyachal Super Thermal Power Station NTPC

Vindhya Nagar

Madhya Pradesh

6 x 210, 4 x 500, 1 x 500 3760

Korba Super Thermal Power Plant NTPC Jamani Palli Chattisgarh

3 x 200, 4 x 500 2600

Sipat Thermal Power Plant NTPC Sipat Chattisgarh

2 x 500,2 x 660 2320

Bhilai Expansion Power Plant NTPC-SAIL(JV) Bhilai Chattisgarh 2 x 250 500

Sabarmati Thermal Power Station Torrent Power Ahmedabad Gujarat

1 x 60, 1 x 120, 2 x 110 400

Mundra Thermal Power Station Adani Power Mundra Gujarat

4 x 330, 5 X 660 4620

Tirora Thermal Power Station Adani Power Tirora

Maharashtra 5 X 660 3300

Mundra Ultra Mega Power Project Tata Power Mundra Gujarat 5 X 800 4000Jindal Megha Power Plant Jindal Tamnar Chattisgarh 4 x 250 1000Lanco Amarkantak Power Plant Lanco Pathadi Chattisgarh 2 x 300 600

Trombay Thermal Power Station Tata Trombay Maharastra

1 x 150, 2 x 500, 1 x 250 1400

Dahanu Thermal Power Station

Reliance Energy Limited Dahanu Maharastra 2 x 250 500

Wardha Warora Power Station KSK Warora Maharastra 1 x 135 135Amravati Thermal Power Plant INDIABULLS

Nandgaonpeth

Maharashtra 10 X 270 2700

Ramagundam B Thermal Power

APGENCO Ramagundam

Andhra Pradesh

1 x 62.5 62.5

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Station

Kothagudem Thermal Power Station APGENCO Paloncha

Andhra Pradesh

4 x 60, 4 x 120, 2 x 250, 1 x 500 1720

Dr Narla Tatarao TPS APGENCO

Ibrahimpatnam

Andhra Pradesh

6 x 210, 1 x 500 1760

Rayalaseema Thermal Power Station APGENCO Cuddapah

Andhra Pradesh 4 x 210 840

Kakatiya Thermal Power Station APGENCO Chelpur

Andhra Pradesh 1 x 500 500

Raichur Thermal Power Station KPCL Raichur Karnataka

7 x 210, 1 x 250 1720

Bellary Thermal Power station KPCL Kudatini Karnataka 1 x 500 500North Chennai Thermal Power Station TNEB Athipattu

Tamil Nadu 3 x 210 630

Ennore Thermal Power Station TNEB Ennore

Tamil Nadu

2 x 60, 3 x 110 450

Mettur Thermal Power Station TNEB Metturdam

Tamil Nadu 4 x 210 840

Tuticorin Thermal Power Station TNEB Tuticorin

Tamil Nadu 5 x 210 1050

NTPC Ramagundam NTPC Jyothi Nagar

Andhra Pradesh

3 x 200, 4 x 500 2600

Simhadri Super Thermal Power Plant NTPC Simhadri

Andhra Pradesh 4 x 500 2000

Neyveli Thermal Power Station NLC Neyveli

Tamil Nadu

6 x 50, 3 x 100, 2 x 210 1020

Neyveli Thermal Power Station NLC Neyveli

Tamil Nadu 7 x 210 1470

JSW EL-SBU-I Power Plant JSW Vijayanagar Karnataka 2 x 130 260JSW EL-SBU-II Power Plant JSW Vijayanagar Karnataka 2 x 300 600Udupi Thermal Power Plant Lanco Nandikoor Karnataka 1 x 600 600

Neyveli Zero Unit STPS NeyveliTamil Nadu 1 x 250 250

Barauni Thermal Power Station NTPC Barauni Bihar

2 x 50, 2 x 105 310

Muzaffarpur Thermal Power Station NTPC Kanti Bihar 2 x 110 220Patratu Thermal Power Station

JSEB Patratu Jharkhand 4 x 40, 2 x 90, 2 x

770

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105, 2 x 110

Tenughat Thermal Power Station TVNL Jharkhand 2 x 210 420Kolaghat Thermal Power Station WBPDCL Mecheda

West Bengal 6 x 210 1260

Bakreshwar Thermal Power Station WBPDCL Suri

West Bengal 5 x 210 1050

Bandel Thermal Power Station WBPDCL

West Bengal

4 x 60, 1 x 210 450

Santaldih Thermal Power Station WBPDCL

West Bengal

4 x 120, 1 x 250 730

Sagardighi Thermal Power Station WBPDCL Monigram

West Bengal 2 x 300 600

Durgapur Thermal Power Plant DPL Durgapur

West Bengal

2 x 30, 1 x 70, 2 x 75, 1 x 110, 1 x 300 690

IB Thermal Power Plant OPGCL Banharpali Orissa 8 x 120 960Captive Power Plant NALCO Angul Orissa 2 x 210 420Kahalgaon Super Thermal Power Station NTPC Kahalgaon Bihar

4 x 210, 3 x 500 2340

Bokaro Thermal Power Station B DVC Bokaro Jharkhand 3 x 210 630Chandrapura Thermal Power Station DVC Chandrapura Jharkhand

3 x 130, 3 x 120, 2 x 250 1250

Farakka Super Thermal Power Station NTPC Nagarun

West Bengal

3 x 200, 2 x 500, 1 x 500 2100

Durgapur Thermal Power Station DVC Durgapur

West Bengal

1 x 140, 1 x 210 350

Mejia Thermal Power Station DVC Durlavpur

West Bengal

4 x 210, 2 x 250, 2 x 500 2340

Durgapur Steel Thermal Power Station DVC Durgapur

West Bengal 2 x 500 1000

Koderma Thermal Power Station DVC Koderma Jharkhand 2 x 500 1000Talcher Super Thermal Power Station NTPC Kaniha Orissa 6 x 500 3000Talcher Thermal Power Station NTPC Talcher Orissa

4x 60, 2 x 110 460

Hirakud Power:CPP

Hindalco Industries Hirakud Orissa

1x 67.5, 3 x 100 367.5

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OBJECTIVEOF

STUDY

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TOPIC

“Financial Analysis & Comparison Of UPRVUNL”

OBJECTIVE

o To analyze the per unit cost.

o To know the financial position of UPRVUNL.

o To make comparison of major financial indicators for power generation of

UPRVUNL with NTPC, GSECL & APGENCO.

o To know the profit generated by the organization of UPRVUNL & its

comparison with other power generation companies.

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IntroductionTo

Company

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UPRVUNL is wholly owned state thermal power utility with present

generating capacity of 4683 MW, operating 5 Thermal Power Stations within Uttar

Pradesh. Poised to contribute in the growth of state, we're in the process of adding

further 1250 MW capacity to our existing fleet by year 2013.

Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) was constituted on

dated 25.08.1980 under the Companies' Act 1956 for construction of new thermal

power projects in the state sector. The first Thermal Power Station constructed by

UPRVUNL was Unchahar Thermal Power Station of 2X210 MW capacity and it was

transferred to NTPC on dated 13.02.1992. On dated 14.01.2000, in accordance to U.P.

State Electricity Reforms Acts 1999 and operation of U.P. Electricity Reforms

Transfer Scheme 2000, U.P. State Electricity Board, till then responsible for

generation, transmission and distribution of power within the state of Uttar Pradesh,

was unbundled and operations of the state sector thermal power stations were handed

over to UPRVUNL.

Today it is looking after operations of five thermal power plants located in different

parts of U.P., with a total generation capacity of 4683 MW with planting facility as

follows.

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OVERVIEW OF THE COMPANY PRODUCTION

NAME OF POWER STATION

INSTALLED CAPACITY

DERATED CAPACITY

TOTAL CAPACITY

ANPARA, 3X210 MW 3X210 MW = 630 MW 1630 MWSONEBHADRA 2X500 MW 2X500 MW = 1000

MWOBRA, 2X50 MW 2X50 MW = 100 MW 1288 MWSONEBHADRA 2X100 MW 2X94 MW = 188 MW

5X200 MW 5X200 MW = 1000 MW

PANKI, 2X110 MW 2X105 MW = 210 MW 210 MWKANPUR PARICHHA, 2X110 MW 2X110 MW = 220 MW 1140 MWJHANSI 2X210 MW 2X210 MW =420 MW

2X250 MW 2X250 MW =500 MWHARDUAGANJ, 1X60 MW 1X60 MW = 60 MW 415 MWALIGARH 1X110 MW 1X105 MW = 105 MW

1X250 MW 1X250 MW = 250 MWTOTAL UPRVUNL GENERATION CAPACITY 4683 MW

As on 01.01.2013 UPRVUNL has 1241 executives and 6996 non-executives on its

roll.

Among these units, many of them have crossed their useful working life of 25 years,

and some of them are closed since long, amounting to an effective available capacity

of 3777 MW only. As against the peak demand for power at over 7500 MW, the

actual average generation in the State is around 2600 MW only. Add to this the

imports of about 3000-3200 MW of power, the total availability of power to the

consumers is around 5400-5600 MW, leading to a deficit of 25-28%.

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Panki Thermal Power StationIntroduction

Panki Thermal Power Station (PTPS), located about 16 km away from Kanpur

railway station, was started with two units (I & II) of 32 MW each (2X32 MW). The

Power house was formally inaugurated and dedicated to the Nation by the then prime

minister Mrs. Indra Gandhi on 7th Sept 1968.

The first unit (unit no.1, 32 MW) was taken on commercial loading on 4th Oct 1967.

The second unit (unit no. 2, 32 MW), similar to the first unit was commissioned on

14th July 1968 for commercial loading.

After generating power for about 28-29 years, 2x32 MW units had completed their

rated life.

Those units were become obsolete and technically not competent to meet out new

pollution norms prescribed by the statutory bodies.

First unit was closed on 30th November 1995 and permanently deleted from installed

capacity of the station  by the Central Electricity Authority (CEA) w.e.f. 31st Aug

1999.

The second unit was closed on 18th April 1997 and permanently deleted from

installed capacity of the station  w.e.f. 10th June 2005.

Extension of Plant

•         In 1976-77, two new units (2 x 110 MW units), manufactured, supplied,

installed & commissioned by BHEL, were introduced as an extension of this power

plant.

•        Unit no. 3 (110 MW) was commissioned on 10th  Nov 1976.

•        Unit no. 4 (110 MW) was commissioned on 24th  March 1977.

•       The units 3 & 4 are exactly identical.

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•       These units have been de rated to 105 MW each by the Central Electricity

Authority (CEA) w.e.f. 11th Jan 1990 resulting in present installed capacity of the

station as 210 MW.

•       The units were equipped with Electro Static Precipitators (ESPs) in Jan 1993

(unit III) and July 1996 (unit IV).

Technical  Features of 2X110MW Units

The 110 MW units are designed based on universally adopted conventional design of

sub-critical coal fired power generating units with features of reheating and

regenerative feed heating system.

Steam Generator

•         Coal is fed to the boiler using pulverized coal feeding technology with semi

direct type of firing system.

•         Coal is pulverized in pulverizes (drum type coal mills) and stored in pulverized

coal bunkers (PC bunkers), from where it is pneumatically transported and supplied to

the boiler through primary air.

•         Total required air for combustion is supplied in furnace through 02 nos. of ID

fans, 02 nos. of FD fans & 02 nos. of PA fans.

•         Primary air consists of approximate 30% quantity of total required air and

remaining 70% quantity is supplied as secondary air.

Turbo-generator

•         Turbine is of multistage, impulse reaction type consisting three separate turbine

cylinders arranged linearly.

•         These turbine cylinders are of high pressure (HP), intermediate pressure (IP)

and low pressure (LP) turbines. The rotor shafts, of turbines and generator are

connected in tandem compounding.

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•         Main stream is fed to the high pressure (HP) turbine from the boiler and exit

steam from HP turbine is taken back to the re-heater section of steam generator

(boiler) through cold reheat (CRH) steam line to re heat it up to the temperature of

main stream (540C).

•         The steam from intermediate pressure (IP) turbine goes to low pressure (LP)

turbine and finally exhausted in condenser through low pressure (LP) turbine. LP

turbine is of double flow type.

Generating Units at Panki Thermal Power Station

All the units of this station are coal fired thermal power plants, having a total

generating capacity of 210 MW and consists of following units -

Stage

Units No.

Installed Capacity

Derated Capacity

Date of Synchronization

Date of Commercial Operation

Original Equipment Manufacturers

1.

1 32 MWDELETED 04.10.1967

2 32 MWDELETED 14.07.1968

2.

3 110 MW 105 MW 10.11.1976 29.01.1977

M/s Bharat Heavy Electricals Limited.

4 110 MW 105 MW 24.03.1976 29.05.1977

M/s Bharat Heavy Electricals Limited.

The coal to all these units is fed from coal mines of BCCL, ECL by means of railways.

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Anpara Thermal Power StationAnpara Thermal Power Station is located at Anpara in Sonbhadra district in the Indian

state of Uttar Pradesh, about 200 km (120 mi) from Varanasi on the Varanasi - Shakti

Nagar route.

Operations

There are in total seven operational units, all of which are coal-fired thermal power

stations. The machinery for the Anpara A ( 3 units) are from Bharat Heavy Electricals

Limited. Anpara B (two units) from Mitsubishi Corporation, Japan.Machinery for

Anpara C were sourced by Lanco power. Machinery for Anpara D is sourced from

BHEL. The coal to all these units is fed from Kharia, Kakri and Beena open coal

mines of NCL by company owned freight trains, a merry go round system maintained

by UPRVUNL and previously on roads by Dumpers.

Capacity

Anpara A station and B station has a capacity of 1630 MW in total. Each of the first

three units has a capacity of 210 MW and the other two have a capacity of 500 MW

each. The last unit of 500 MW was commissioned in 1994.Anpara C has installed

capacity of 2X600 MW. Under construction Anpara D will again have 2X600 MW

installed capacity.

Anpara was initially made in two phases, Anpara A (last unit commissioned in1983)

& Anpara B (last unit commissioned in 1994) by erstwhile UPSEB. In year 2007

Anpara C was allotted to be constructed in PPP sector domain. The new power plant

made under PPP by Lanco-infrastructure and Run by Lanco power 2x600 MW. Last

unit of Anpara C was commissioned in 2012. Under State government's flagship

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power-generation company UPRVUNL, a new unit Anpara D is under construction in

full swing. Units are configured for generating 2x600 MW and are manufactured by

BHEL. Plant is expected to be operational in 2014.

Plant Location

The Anpara Power Plant is located near village Anpara on the bank of Rihand

reservoir in the district of Sonebhadra (Uttar Pradesh). It is about 34 km from Rihand

Dam on Pipri-Singrauli road and about 200 km from Varanasi. Varanasi is connected

by air/rail and road route from other major cities.

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Generating Units at Anpara Thermal Power Station

All the units of Anpara TPS are coal-fired thermal power plants, having a total

generating capacity of 1630 mw and consists of following units -

Stage

Units No.

Installed Capacity

Derated Capacity

Date of Synchronization

Date of Commercial Operation

Original Equipment Manufacturers

1

1 210 MW 210 MW 26.03.1986 01.01.1987M/s Bharat Heavy Electricals Ltd.

2 210 MW 210 MW 28.02.1987 01.08.1987M/s Bharat Heavy Electricals Ltd.

3 210 MW 210 MW 12.03.1988 01.04.1989M/s Bharat Heavy Electricals Ltd.

2

4 500 MW 500 MW 19.07.1993 01.03.1994M/s Mitsubishi Corporation, Japan

5 500 MW 500 MW 04.07.1994 01.10.1994M/s Mitsubishi Corporation, Japan

The coal to all these units is fed from Kharia, Kakri and Beena open coal mines of

NCL, by means of a marry-go-round system, maintained by UPRVUNL.

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Obra Thermal Power Station

It is in district SONEBHADRA about 13 KM from CHOPAN railway station, about 8

KM off SHAKTI NAGAR road. It is about 125 KM from VARANASI, which is

connected by air/rail and road route from all major cities.

Obra power plant has 1550 Megawatt power. It is first 200MW Power plant in India.

It also a thermal Plant has 5*50+3*100+5*200=1550MW.

The thermal station has 13 units with the total capacity of 1550 MW and the Hydel

has a maximum capacity of 99 MW. But the power plant has passed an upgrade of 2

more units with a power generation capacity of 660MW which is expected to be ready

by 2011. The power plant will surely help coping the deficiency of electricity. One of

the major achievements for the plant is that it was the Asia's number 1 Thermal Power

production plant in the 1980s.

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Generating Units at Obra Thermal Power Station

All units of this power station are coal fired thermal power plants, having a total

generating capacity of 1288 MW. The power station consists of following units -

Stage

Units No.

Installed Capacity

Derated Capacity

Date of Synchroniz

ation

Date of Commercial Operation

Original Equipment Manufacturers

1

1 50 MW 50 MW 15.08.1967 15.08.1967

BOILERS FROM M/S TAGANROG & M/S L M Z OF USSR

2 50 MW 50 MW 12.02.1968 11.03.1968 -DO-3 50 MW Deleted 13.10.1968 13.10.1968 -DO-4 50 MW Deleted 11.06.1969 16.07.1969 -DO-5 50 MW Deleted 30.07.1971 30.07.1971 -DO-

2

6 100 MW Deleted 04.10.1973 04.10.1973

M/s Bharat Heavy Electricals Limited, India.

7 100 MW 94 MW 14.12.1975 14.12.1975

M/s Bharat Heavy Electricals Limited, India.

8 100 MW 94 MW 15.09.1975 01.01.1976

M/s Bharat Heavy Electricals Limited, India.

3

9 200 MW 200 MW 26.01.1980 15.03.1980

M/s Bharat Heavy Electricals Limited, India.

10 200 MW 200 MW 14.01.1979 06.03.1979

M/s Bharat Heavy Electricals Limited, India.

11 200 MW 200 MW 31.12.1977 14.03.1978

M/s Bharat Heavy Electricals Limited, India.

4

12 200 MW 200 MW 28.03.1981 29.05.1981

M/s Bharat Heavy Electricals Limited, India.

13 200 MW 200 MW 28.07.1982 29.07.1982

M/s Bharat Heavy Electricals Limited, India.

The coal to all these units is fed from coal mines of BCCL, ECL by means of

railways.

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Parichha Thermal Power Station

It is located in district JHANSI about 25 KM before JHANSI, on KALPI-JHANSI

road. Jhansi is well connected by air/rail and road route from all major cities.

Generating Units at Parichha Thermal Power Station

All the units of this station are coal fired thermal power plants, having a total

generating capacity of 1140 MW and consists of following units –

Stage

Units No.

Installed Capacity

Derated Capacity

Date of Synchronization

Date of Commercial Operation

Original Equipment Manufacturers

1

1 110 110 31.03.1984 01.10.1985

M/s Bharat Heavy Electricals Limited, India.

2 110 110 31.03.1984 Dec.1984

M/s Bharat Heavy Electricals Limited, India.

2

3 210 210 May.2006 24.11.2006

M/s Bharat Heavy Electricals Limited, India.

4 210 210 28.12.2006 01.12.2007

M/s Bharat Heavy Electricals Limited, India.

3

5 250 250 15.05.2012 17.07.2012

M/s Bharat Heavy Electricals Limited, India.

6 250 250 17.09.2012 18.04.2013

M/s Bharat Heavy Electricals Limited, India.

The coal to all these units is fed from coal mines of BCCL, ECL by means of

railways.

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Harduaganj Thermal Power Station

Harduaganj Thermal Power Station is located at Qasimpur Power House Colony

which is 1 km distance from Harduaganj Railway Station at Harduaganj in Aligarh

district in the Indian state of Uttar Pradesh, about 18 km from Aligarh.

Capacity

Harduaganj Thermal Power Station has an installed capacity of 665 MW.

1 Unit of 60 MW capacity (it is unit number fifth).

1 Unit of 110 MW capacity (it is unit number seventh and its capacity derated

to 105 MW).

1 Unit of 250 MW capacity (it is unit number eighth).

1 Unit of 250 MW capacity (it is unit number ninth).

Its last unit (ninth unit) of 250 MW became operational in June 2012.

Generating Units at Harduaganj Thermal Power Station

All the units of this station are coal fired thermal power plants, having a total

generating capacity of 415 MW and consists of following units –

Stage

Unit

No.

Installed

Capacity

Derated Capacit

y

Date of Synchronizati

on

Date of Commerci

al Operation

Original Equipment

ManufacturersATPS

I 30 MW DELETED      

II 30 MW DELETED

     

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III 30 MW DELETED      

BTPS

1 50 MWDELETED 02.03.1968 21.04.1968 USSR

2 50 MWDELETED 11.01.1969 23.01.1969  

3 55 MWDELETED 17.01.1972 Mar.1972

M/s Bharat Heavy Electricals Limited.

4 55 MWDELETED 09.09.1972 18.09.1972

M/s Bharat Heavy Electricals Limited.

CTPS

5 60 MW 60 MW 21.03.1977 14.05.1977M/s Bharat Heavy Electricals Limited.

6 60 MWDELETED 21.08.1977 26.10.1977

M/s Bharat Heavy Electricals Limited.

7 110 MW 105 MW 31.03.1978 Aug.1978M/s Bharat Heavy Electricals Limited.

HTPS Extn.

8 250 MW 250 MW 10.08.2011 01.02.2012M/s Bharat Heavy Electricals Limited.

9 250 MW 250 MW 02.04.2012  M/s Bharat Heavy Electricals Limited.

The Coal to all these Units is fed from Coal Mines of BCCL, ECL by means of

Railway.

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Vision

Vision statements have become fashionable for every organization. This helps

galvanize energy of stakeholders to provide support to the mission of the

organization. However for many organizations it turns into a bitter dream causing

demoralization among stakeholders. This happens because the vision is not supported

by strategic plans and actions due to poor resource base or poor resource allocation or

environmental vagaries or just appear incredulous to stakeholders. UPRVUNL will

avoid this vision trap by avoiding such possible pitfalls. The vision statement should

be broad enough to capture the future diversity of actions by bearing on internal

competencies, and changing when the environment changes. We sate the vision

statement as follows:

“Act as catalyst in making Uttar Pradesh an electricity surplus state by

2018 and help energize every electric device in the country beyond

2018”

Catalyst: This is because UPRVUNL cannot hope to accomplish the growing energy

needs on its own but by developing partnerships with many other suppliers,

competitors and buyers.

Electricity surplus State: Based on the demand projections UPRVUNL will go

beyond what it is already doing today, and by other states, national and private players

, it will build collaborations and also produce on its own the future needs of the sate

and the country .

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Help energize every electric device in the country: UPRVUNL will not stop

functioning in 2018 but will continue to add to the generation of electricity, if need be

by other input methods

Beyond coal: hydrocarbons, hydropower, nuclear, non-conventional sources by

learning through R&D and collaborations with technology partners; maintaining a

catalytic role.

Mission

While almost every organization has a vision many do not have written statements

because on paper they look less convincing. Most firms therefore move beyond the

vision and articulate their mission statements that are more tangible, credulous and

more often written. Typically firms and corporations articulate their mission

statements which drive from the vision, written or unwritten. While visions are

futuristic intensions, aspirations and dreams, mission seem to reflect of either short

term future direction or the businesses they operate in. The key elements that mission

statements contain are obligations to stakeholders, scope of business, sources of

competitive advantage and view of the future consistent with the long-term vision. In

general they contain the role that the company wishes to adopt for itself, a description

of what the company hopes to accomplish, a definition of the business and means to

gauge the future success. Base on these guidelines we develop below the components

of the mission statements and then a more integrative mission statement.

Obligation to stakeholders

There are many stakeholders who have stake in the business of UPRVUNL:

Shareholders, lenders, the UP Government , business partners, customers both

intermediaries and consumers, the employees of all cadres- managers, engineers,

ministerial, support staff and labour contractors, regulators, environmental groups,

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broad communities, and society in general. It is important to recognize that these

stakeholders benefit or get impacted by the operation of UPRVUNL who may have

conflicting interest and degree of power and may demand management to pay more

attention to the specific stakeholders group at the expense of others. It is the role of

the managers to minimize these conflicts so that their positive energies are utilized to

realize the sated vision. Obviously it must address their emotions and their interests.

We may state

“We will serve each of our stakeholders amicably through a democratic process”

Scope of Business

This defines the boundaries of the business. It is necessary to maintain focus on the

business. It should not be too narrow to miss future energy trends nor should be too

broad that it loses its direction. While it should maintain its focus on electricity

generation but it cannot lose sight of opportunities in transmission, distribution on the

value chain nor could the other sources of energy.

UPRVUNL will remain in the generation activity through thermal power stations

using predominantly coal and gas with oil as auxiliary feed. However it may get

involved with the generation by using other raw material like LNG and hydro electric

generation as and when the need so arises, besides working with partners in non-

conventional/ renewable sources of energy in the very long term. In the short run

however, it will focus on generating energy by using coal, which is its area of

competence. Any other ventures beyond the thermal power based on coal feed it will

explore the joint venture route as and when the opportunity arises.

Thus, “UPRVUNL strives to produce and supply electric energy in the most

efficient manner”

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Sources of Competitive advantage

No business survives in the long-run without any competitive advantage or

uniqueness. Although electricity generation is the commodity business but the way it

is supplied or generated at the right frequency can have distinct impact on the

performance, which implies least cost production among its peer group. Since

UPRVUL is still the largest producer of electricity it would continue to do so, even

better, what it is doing by building operational excellence by encouraging, motivating

and incentivizing its technical people which are engineers of high quality, which most

competitors do not have access to. This can define its distinctiveness if it builds

enabling systems for engineers to deliver their best. Therefore smoothening the

operating systems which can provide it the distinctive competence that it needs to

compete in the future competitive environment.

Therefore “it will compete on the basis of its technical core”.

View of the future

“UPRVUNL will be the most efficient and one of the most responsive electric

energy supplying utility in the country with a pride in its technical core” with a

leadership role in the state of Uttar Pradesh where it will be leader in catalyzing the

resources for the development of the State .

Mission Statement

UPRVUNL will be leader in generating, transmitting and distributing electric

energy most efficiently through collaborations with its partners by using its

technical people as its Competitive advantage while balancing and serving the

interest of all of its stakeholders.

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Corporate Values

1. Excellence in everything it does

2. Respectful and fair to each employee

3. Committed to nurturing of its technical talent

4. Fair to its partners

5. Will remain environmentally and socially responsible.

Corporate Objectives

1. Build a strong competence in customer responsiveness by leveraging human

resources through training, development and motivation.

2. Expansion and growth by improving the efficiency of existing plants and adding

new generation capacities.

3. Reducing supply chain bottlenecks and operating costs.

4. Diversifying both into vertical chain activities and diversifying the input base that

lead to the leading market share.

5. By taking advantage of economies of scale becoming the lowest cost generator of

Electricity in the state and the country.

6. Partnering with other entities to minimize investment needs and reducing the

Investment risk.

7. Becoming one of the leaders in environmental management and socially

responsible citizenship in its peer group. In order to meet the objectives, mission,

vision of the corporation, UPRVUNL needs to take stock of its Strengths and

weaknesses and assess the environmental future threats and opportunities in order to

allocate resources judiciously. There we attempt the SWOT Analysis.

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SWOT Analysis

Strengths

1. Ownership is with state government that reduces the risk of liquidation who can

make investment in public interest should the things turn hostile.

2. It has R&D support from Central Electricity Authority keeping the research and

development costs almost zero.

3. It is easy to get land and environmental clearances from respective authority

without suspecting foul play.

4. It has top management who very competent and committed who work for the

government as well as for the corporation- facilitating government support as and

when required.

5. UPRVUNL has a rich history and competence of generating electricity through

coal and oil, water with priority allocation of inputs.

6. The input costs are cushioned against market price vagaries and thus helps in

realizing costs through regulated tariff system.

7. It has access to large real estate which is now free of cost and does not require fresh

investment with all the facilities required for a TPS like water, transport access.

8. It has the largest market share of about 50% of capacity in generation business as

compared to its competitors. The actual capacity for generation is 3933 MW as on 31st

March, 2011 after excluding unit 6 of Obra and unit no. 3 of Harduaganj.

9. Assured market reducing the cost of marketing because of historical relationships

and scarcity of electricity. Demand is not an issue for next 10 years.

10. Most of the plants are depreciated leading to less strain on the balance sheet.

11. It has the largest number of technical manpower in the state and one of the largest

in the country that is well experienced.

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12. The percentage of youngsters is growing beyond 50% (about 750 out of 1450) at

executive (technical) level which are well educated, getting good training and are very

motivated.

13. Corporate values are already articulated and are in place.

14. Security of employment provides stability to the knowledge base which does not

migrate continuously and good compensation policy.

Weaknesses

1. Being state owned organization it suffers from slow decision making process and

dealing with less risky but expensive suppliers and buyers which also limit speed of

decision making.

2. Because of SOE employees do not have commercial mindset.

3. The top management comes from Government which also has its negative side: the

commitment levels are not very high because of uncertain tenure.

4. Cost, quality, and schedules for “works” lower efficiency in O&M and Project

Management.

5. Has already adequate input linkages.

6. Three Full time directors’ positions are vacant, substituted by part time director

finance, and former technical director serving as advisor. Post of Director Personnel is

vacant.

7. Disputes on seniority are quite frequent which delays the promotion on senior

positions since last many years lowering motivation.

8. Promotions are not based on competence but other politically determined criteria.

9. Old organization continues which is not consistent with today’s ground realities.

10. Induction on compassionate ground has resulted in work inefficiencies and high

cost work force, which UP Government has already stopped in its own departments.

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11. Roles and responsibilities are not commensurate with compensation, which are

needed to be defined and refined.

12. Deferred or partial payments by customers adversely affect the cash cycle.

13. It is difficult to mobilize equity and thereby loans due to profit/loss account losses

and because government also takes very long time in implementing financial

recommendations.

14. Supply of coal comes from distantly located pit heads increasing input

transportation costs.

15. Government ownership provides cushion against inefficient working resulting in

lower efficiencies.

16. Very high age of plants keeps the breakdowns as frequent resulting in lower PLF

and high input costs.

17. Project implementation is a very serious drawback for lack of project management

skills and bureaucratic procedures.

18. Poor contract reinforcement with equipment suppliers like the virtual monopolist

BHEL resulting into high cost and time overruns.

19. Coal linkages for plants are inadequate for future needs.

20. Aging work force has acted as a drain for long time which is addressed only

recently.

21. Coordination and communication processes are very slow.

22. Technology enablers such as IT have only been addressed recently whose

implementation is moving at a slow pace.

23. Inadequate focus on regulatory affairs. Handled at plant level instead of corporate

level.

24. Auxiliary consumptions are very high compared to its competitors like NTPC.

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25. Political interference at the level of supplies (favored), operations- lack of proper

allocation of manpower at right jobs/ place, sub-contractors, and employees

(transfers/promotions).

26. Lower PLF compared to competitors and national average makes operations

expensive.

27. It is estimated that the balance sheet may have the losses until 31st March 2010 to

the tune of Rs. 585.7 crore as per provisional balance sheet, whereas we have

repayments from customer of the same tune, therefore the interest cost without any

benefits to corporation.

Opportunities

1. BOP and BTG can be awarded through bidding system instead of single supplier as

is given to BHEL which do not adhere to timelines of the contract who do not pay

penalties for project time over runs.

2. Possibility of increasing revenues through CDM, PAT (Perform, Achieve and

Trade) mechanism of BEE (Bureau of Energy Efficiency).

3. There is a good opportunity to increase the PLF close to national average of 75%

thereby rising higher generation of electricity.

4. Revenues can further increased by gains from UI provisions through disciplined

management of its resources.

5. There is going to be about 10-20% gap until 2017 in the demand and supply which

will ensure that whatever is produced is consumed- no demand risk

6. Fuel security through JVs with mining companies.

7. Productivity improvements through usage of IT applications.

8. Improving financial health by setting outstanding receivables from UPPCL through

interdepartmental coordination.

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9. New projects can improve the PLF, and higher energy generation which will have

positive impact on the financial health.

10. Automated equipments / super critical plants can produce higher levels of energy

at reduced prices.

11. Renewable sources especially solar energy can be a good opportunity in future

especially in UP which eventually translate into more energy with lower costs

12. Availability of land from ash ponds, which can be utilized for further expansion

by converting that land planting Jatropha plants which can be converted into diesel,

and we can earn carbon credits too.

13. Scrapping the non-functional units that are officially deleted. They can be sold out

in market and vacated land can be used for new plants eg. Obra and Harduaganj units.

The scrapped units can be sold through MMTC.

14. Scope for Joint venture exists today more because private sector has already

moved in generation and many is willing to join the business that normally does not

have experienced manpower.

15. Value chain partners and competitors are willing to join forces to produce

electricity like NTPC, Coal India limited, even transmission and distribution

companies.

16. The distribution sector is opened for participation by generation companies

improving scope for vertical integration.

17. Government, including SERC is very responsive and accommodating if willing to

improve electricity generation 3

Threats

1 .BTG had been given without tender to BHEL, which has become a liability because

of noncompliance of the agreement- non competitive rates and late completion of the

projects against DPR/Work Order.

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2. BHEL has taken advance money for R&M but may not start work even in future.

Which may result in closure notice from Central Pollution Control Board and other

regulatory authorities, which may cause higher penalties and closure of old plants

draining production capacity and profitability.

3. Integrity of employees, suppliers as mafias with political linkage are a serious

threat to the functioning of UPRVUNL.

4. The deregulated generation sector may see more competition in future which may

threaten the leadership position of UPRVUNL Operations.

5. New plants have long gestation periods making the progress slow towards

leadership position.

6. The aging plants under perform but maintenance cannot be done on schedule

because of demand pressure.

7. Pollution control regulation is becoming more stringent under international

guidelines whose compliance can threaten closure of many units, if not acted upon in

time.

8. Coal mafia continues to exert pressure on the prices, quality and quantity of coal.

9. The constant pressure on input prices may build pressure on energy prices which

because of more competitive output may force regulator to reduce prices which may

adversely affect the expansion plans.

10. Government is rather reluctant to provide additional equity required for expansion

of capacities and thus affecting expansion plans.

11. The skill gap appeared because of attrition due to retirement or lack of training in

ABT Regime.

12. Continuing government mindset may result in serious lag in financial viability of

future.

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13. The state of monopoly has already been threatened by larger firms with adequate

investment capacity which is likely to threaten the leadership position of Nigam.

14. At some point in time the UP State may get trifurcated reducing the power of the

Nigam as happened in case of Uttrakhand.

15. The stranglehold of politician may become worsen in future in curbing the

freedom of the professionally managed corporation, because of 100% ownership.

16. Increasing inflation may lead to higher interest rates, wages and cost of electricity

unless competition brings in commensurate reduction in operating costs.

17. The continuous changes in the business environment makes it difficult for

companies to keep environmental knowledge undated regularly which calls for

continuous learning to which old timers are ill-equipped to handle.

Corporate & Business Strategies

We classify our recommendations into ten broad categories: managing dynamic

environment, business portfolio, Smoothening supply chain, Operations including

project management, Organizational restructuring, Human Resource management,

Board of Directors, Investment management, Employee welfare and Corporate Social

responsibility.

Managing Dynamic Environment

1. There is a need for a business planning Department to collect, generate and collate

data so that informed decision can be made. This unit can scan information regarding

customers, suppliers, regulatory changes, business opportunities, partnership

opportunities, Human resource related practices, new technologies, competitor

activities, political changes, social changes, economic and financial matters, pollution,

energy audit reports, related technologies, issues of sustainability.

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2. This department can be headed by a Director Corporate Strategy (25-30 years

experience) trained or experienced enough in strategic Planning who may be

supported by other managers (see corporate structure) and young business analysts (2-

3 years experience with MBA degree) with some specialization in economics,

statistics, environmental engineering/ pollution control, business development, with

skills in competitor and customer analysis, a financial manager, an electrical

technologist.

3. The roles will be to analyze related issues through different disciplinary

perspectives and build a comprehensive view of the issue at the planning levels. They

will also be responsible to continuously review the current business environment and

suggest future trends with respect to new emerging trends. They will assist the

operating managers on various issues including the related data/ information

availability. Some of the hard data will be stored in the computers which will be

accessible to anyone who want any relevant information. They will help set up

monthly, quarterly targets, annual targets and plans and 20 years rolling plan. They

will also alert respective operating managers about any significant changes that might

affect their functions. We have recommended this entity on environmental

intelligence because the future leaders will compete on the basis of superior

knowledge and information and also we think the high quality manpower is going to

be the basis of competition at least for UPRVUNL as we have recommended in the

mission statement. This unit will work as a brain of the corporation. Needless to

mention that highly qualified people should be brought in or developed through

extensive training in their respective areas. It will help identify future threats and

opportunities and at the same deepen the organized and disciplined decision making

which is right now in a very ad hoc and rudimentary form.

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Business Portfolio

1. Consider continuous evaluations of each generating unit which can perform above

60% PLF with low maintenance, otherwise scrapped. We have analyzed below that

the new capacity additions are more beneficial than renovation & modernization

beyond certain performance point.

2. Any future generating unit should not be below 500 MW as the new entrants will

come with super critical plants who will threaten the leadership position of

UPRVUNL. The larger plants have higher fixed costs but lower running expenses and

thus making smaller plants or less capacity plants as unviable in 10-15 years time

period.

3. Since most places land and utilities are already developed and there is ample scope

of putting up new plants which may not face demand crunch and it should help

UPRVUNL to maintain its leadership profitably at least until 2017. We need to

explore new plot of land for future expansion

4. We can consider LNG based thermal plants if the LNG linkages could be tied up in

the medium term.

5. In the meantime we also explore the no conventional energy sources for which we

can create a new cell and recruit experienced engineers for experimentation. The

special interest areas could be solar energy, Jatropha plant based fuel. This may help

in getting renewable sources of energy. The technological Institutes may be made

partner in R&D besides exploring R&D based small firms or joint partners for

exploring newer technologies (0.5% of sales could be allocated to this unit on new

product or process development). They pay offs could be long-term.

6. In addition we put up at least limited resources (1%of sales) in R&D and get

external consultants to assist in R&D lab to find ways and means of improving

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operational efficiencies in plant which look for reduction in auxiliary

consumption in operations and examine the whole input supply chain.

7. Also the planning unit can explore possible partners who can work as partners in

joint ventures which will ease input supplies, or bring in much needed equity into new

plants. Part of employees could be shifted to the joint venture. This will give a chance

to bring in efficiencies in our own plant as the JVs can work and learn in less

bureaucratic environment away from political interference or operational fire fighting.

Smoothening Supply Chain

1. There had been major problems in getting BTG Equipment because BHEL had

been a sole supplier, which had not delivered equipments in time whether related to

R&M or new turbines, which is the major cause of concern at UPRVUNL as many

projects are delayed because of BHEL. It is suggested that both BTG and BOP

supplier base must by necessity be diversified and the tendering process strengthened.

There are now international vendors in these areas which are allowed by the

government to sell equipments in the county.

2. On oil supply there are not many problems as we source material from Sate owned

oil enterprises, although adulteration issues can be more rigorously monitored.

However coal supplies that reach the plants are either underweight, or of poor quality.

The corporation has taken many effective steps like the management has appointed

agents who can procure the coal in right quantity and quality. The supplies come from

distant places and thus reducing the quantity reached. Some coal reaches in the form

of mud due to open wagons and some reach with big stones. The corporation should

further look into the ways and means to further reduce any losses either because of

quality, quantity or transportation issues. It is recommended that a committee of

procurement managers/ engineers representing each plant is constituted which will

make further recommendations on the issue.

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Operations including project management

1. Barring a few plants, there is more focus on administration by the engineers than on

engineering work resulting into poor operations management. There are multiple

vendors in the same plant and across different plants. It is suggested that this function

be centralized and engineers are relieved from administrative functions as much as

possible. There must be a single vendor development department for “works” at the

plant level under the direct supervision of the Chief of the plant. The tender must be

invited through UPRVUNL website in order to reduce the impact of local political

influence. The vendor should also be empanelled. There should also be a head office

representative in the vendor selection committee at the plant level.

2. Inventory and store systems should be computerized and proper system established

so that the items can be identified easily. This can be automated with the help of

inventory order system available from many vendors. Physical verification each year

should be carried out regularly and physical stock reconciled with the database.

3. ERP needs to be implemented urgently so that data is available for informed

decision making. It calls for an experienced vendor especially with organizations in

electricity generation. The store/purchase employees should be trained in IT

applications for store and purchase.

4. Ash disposal is a major concern around the plants. It is suggested that like NTPC

regular auction be carried out. The neighborhood cement manufacturing companies/

road construction companies should be invited to submit tenders/ bids.

5. The major concern as witnessed during plant visits and also the review of

performance of plants indicate that the project management is the weakest link in

spite of the fact many managers are interested in getting job posting in these

departments., resulting into delays and higher costs. Since the corporation is

expanding operations there is a need to create a special group properly experienced in

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electricity generation and project management techniques in order to keep good

control on cost and time over runs? Since projects are left to operating managers who

are busy firefighting operational glitches especially in the light of aging plants, cannot

pay adequate attention to the progress of projects and thus it must be separated.

6. Although utilities maintenance is found to be reasonably all right except ash

disposal, There is need for continuous improvements after setting standards for each

activity, including, water, land, roads, electrification, hospitals. Schools etc in proper

form.

7. The bench mark studies against CEA norms and/or NTPC comparable plants

indicate that most of UPRVUNL plants are underperforming: PLF, availability factor,

Station Heat Exchange Ratio, Auxiliary consumption, outages; which have adverse

impact on the cost/ MU and also the profitability of the corporation. The reasons of

course are old plants, poor execution of R&M, O&M and delayed projects for up

rating or new capacity additions. The targets must be revised upward. As a thumb rule

there ought to be at least 2-3% improvement in each operational parameter with 2010-

11 as base year. We expect until 2017 an improvement of 12-15% over the base year.

The same can be translated into each plant and unit so that disaggregated targets can

be set. Needless to mention that in addition to enabling corporate environment,

including, restructuring of

Organization, cadres, smoothening supply chain; monetary incentives be linked with

the weighted average of PLF, Auxiliary consumption, SHR, Outages with 40%, 30%,

20%, 30%. If the savings are indeed achieved which may have impact of 8-10% every

year. The cash incentives of 1-2% of the savings or growth may be passed on to

employees.

8. The main reasons of lower performance are the aging plants, lower machine loads,

forced outages, high auxiliary consumption, Station Heat Rate, and also because of

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slow progress of R&M due to lack of structural focus and non-supply of equipments

by BHEL, who go scot free without penalties . Serious competition among vendors is

introduced by inviting tenders from international suppliers.

9. Energy accounting and billing are still weak areas and there is something to learn

from NTPC. That is why beside organizational and cadre restructuring, training and

development are emerging key thrust areas especially Strategic management, HR,

financial and project planning and implementation.

Human resource management

The analyses carried out by the HR department of the Nigam indicate excess

manpower by any standard. The major concerns indicated are

1. Many units are deleted (Panki 2 units, Harduaganj 4 units, and Obra 3 units) but the

positions have not been scrapped. Contrarily some of the new units are established: 2

units are Paricha and 2 units at Hurduaganj. The new positions are not created

inducing murkiness in the manpower allocation. This notwithstanding the CEA norms

is available beside NTPC benchmarks.

2. Similarly positions required for new tasks have not been articulated: HR, Fuel,

R&M, Environment, IT and commercial. These entities are working against positions

sanctioned under PPMM, thermal operations and plants which are needed to be

regularized. The commissioning staff required for new projects has not been provided

with new positions sanctioned. 3. There are shortages in technical cadres as against

the support staff. Although there appears to be shortage against the sanctioned staff

across board but many units have been closed down.

4. There is a lack of role clarity at different levels some of which is caused by the

number of employees working against the sanctioned strength drawing salaries with

lower level designations, known as Resultant Seniority concept. There is lack of

specialization. No clear cut policy exists besides the relative disliking for operational

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jobs as against project jobs. This requires job restructuring of work which is being

currently carried out by E&Y Consultants.

5. Engineering staff is dominated by non-degree holders due to promotions.

6. The appraisal system does not reflect the actual performance which is more driven

by human concerns and relationships rather than contributions, partly affected by

internal political influences.

7. There is a need to redesign the cadres followed by role analysis and competence

mapping study to find gaps and transfer employees after retraining for right jobs. To

minimize discontent among educationally well qualified personnel the assessment of

educational background and promotions linked to proper appraisal based on

competence mapping profile and actual performance should be introduced.

Introduction of a block/ cadre system like E-1, E-2, E-3, E-4 AND E-7 and E-8 and

above, to provide flexibility in promotions. Cadre restructuring can be inspired by the

system implemented at NTPC.

8. Training programmes should be organized according to the competence assessment

and training gap thereof with respect to hard and soft skills, including leadership

development programmes Executive Engineer levels and above. The lower level

employees should also be given substantial training in domain areas.

9. At least 3% of revenue must be allocated to training/ education and development

purposes of staff, officers and management.

10. Looking at scarcity of educated and trained manpower it is extremely urgent to

begin recruitment at AE level.

11. There is a necessity to set up examination system before promoting offices from

lower to SE level. Thereafter it may be based on personal interviews with selection

committee dominated by independent experts. In fact a one-year MBA degree from

A-rated institutions is must for SE level and above which can be sponsored by the

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Nigam with a bond of 3 years post-sponsorship of MBA. Those already with MBA

from C-grade institutions should also be sent for A-rated MBA programmes. Those

with A-rated MBA s may be sent to foreign universities for short duration courses of

the length of 15 days to 3 months, which are likely to be specialized in project

management, operations management, HR management, Strategic management and

financial management . These recommendations are specifically relevant because

UPRVUNL is expected to compete on the basis of human resources.

Organizational Restructuring

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1. Organizational structure is designed keeping in mind how to divide the overall

organizational task into subcomponents and then reintegrating so that there is

forward movement towards accomplishment of the vision and mission and

corporate objectives. In sum it helps multiple people work in cooperative

manner rather than working at cross purposes. The functional structure creates

high level of specialization and provides the basis of competence on the

functional axis of the organization like supply chain, operations, marketing &

sales and customer service. The staff functions like, HR, R&D, procurement

and strategy provides the support to functional line managers. However it

results in functional silos and very high information overload at the staff

functions

2. The divisional structure helps reduce the information overload and treats the

divisional heads as CEOs of their own business. Strategic & financial responsibility

rests with the divisional heads who report to the corporate CEO and consults the

corporate top functional experts. This structure provides for every division all the

functional expertise as is the case with functional structure. There is duplicity of

functions in this structure and thus raises the cost of organizational structure.

However the benefits overweigh the costs because of clear accountability and profit

responsibility. In sum, each plant should be converted into a profit centre with Profit

and loss responsibilities.

3. So far UPRVUNL had been following the functional structure and speed of

decision making was hampered, reducing the strategic thinking time for top

executives. It is important to mention that many of the top management’s positions

were not filled up because of logjam in the promotion policy. The operating role and

project roles were almost confounded resulting in poor accountability, slow speed of

decision making and poor monitoring creating poor economic performance. Director

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technical was looking after the whole technical areas and Director HR looking after

the whole organization along with director finance and three of them reporting to

CMD. It was a deceptively simple structure but the study reveals that speed of action

had been very slow derailing the project work beyond any expected time periods.

Some functions were underemphasized in the structure like vigilance & Audit,

Commercial and regulatory which in the E&Y proposed corporate structure capture

the importance from Governance perspective.

4. The Head Corporate strategy should also have to be designated as Director –

Strategy to highlight the importance and quantum of work involved and likely to be

involved in assisting the divisions (plants) in strategy formulation. The subunits below

director should have an environment scanning/ intelligence group which collect

internal and external information and which should report to the Director Strategy. It

should have committee members drawn from PRAGATI, Business Excellence

Initiatives, and IT, beside two members from Corporate and Business Strategy areas.

Similarly all other corporate functions should be headed by Directors (Projects,

Operations, Finance and HR). These functions should have committees in each area

drawn from sub-units reporting to them. These committees meet every bi-weekly to

appraise the progress in each area. Besides, it is proposed to have top executive cross-

functional team consisting of 4 corporate Directors and 5 Plant directors each

representing the plants. This committee should meet every month to monitor the

progress, trouble shoot difficulties and bottlenecks.

5. We also propose a replica of the executive team at the plant level involving

officials of various specializations at plant level. The Business strategies & plant level

operational strategies should be developed at plant level under the leadership of

Director of each plant.

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6. The decision of unit closer in the plant, R&M and up rating or diversification will

vest with the CMD of Nigam assisted by the top executive team. However the

proposal can be mooted by plant directors, which can be reviewed, whetted by the

corporate executive team. Finally these proposals could be submitted to the BOD.

This committee can have special invitees from audit/vigilance etc if the need so arise.

The Directors of the Plants likewise have top plant management team representing

functional plant heads.

Board of Directors

1. The role of Board of Directors is to provide the direction and guidance to the

top management, whet investment decisions (closure, sell off, joint ventures,

new plant/ unit additions), and ensure transparent operations, monitor statutory

obligation compliance, and maintain ethical standards so that the shareholder

interests and other stakeholder interests are protected and equity is maintained.

The two main areas of concern in the BOD are the composition of Board

members representing different interests and maintaining strategic direction of

the corporation. Since the BODs have less time to look into the details of each

decision the Board Committees become essential toll for governance of the

corporation.

.

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Board of Directors

Currently there are 10 members of the Board as given below:

1. CMD, UPRVUNL

2. DIRECTOR TECHNICAL, UPRVUNL

3. DIRECTOR FINANCE, UPRVUNL

4. JMD, UPPCL

5. ED (NR) NTPC

6. PRINCIPLE SECRETARY (ENERGY), Group

7. SECRETARY (FINANCE), Group

8. PRINCIPLE SECRETARY (LAW), Group

9. PRINCIPLE SECRETARY (BUREAU OF PUBLIC ENTERPRISES), Group

10. PRINCIPLE SECRETARY (PLANNING), Group

2. It is clear that consistent with the UP Government ownership most of the

Board members are from the government of Uttar Pradesh. However, it can

become counterproductive as many of these members are reprinted on large

number of Boards and do not have adequate time, inclination and expertise to

guide the future direction of the corporation notwithstanding how brilliant the

persons may have been. Often representatives are sent for Board meetings

with little value addition from the real board members who are ex-offcio

members. The board members also bring with them relationships with the

outside world beside the variegated expertise. Besides, to bring more

transparency it is suggested that outside independent board members be

brought into the Board, considering that the corporation may go public in

future and market will accept less government role at the board level and more

transparency in operations.

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We propose the following Board constitution.

1. CMD UPRVUNL2. Director Operations, UPRVUNL3. Director Finance, UPRVUNL4. Director Strategy, UPRVUNL5. Director HR, UPRVUNL6. JMD, UPPCL7. Secretary (Finance), GOUP8. Principal Secretary (Energy), GOUP9. ED (NR) NTPC10. Independent Director- Nominee of the GOUP (Could be from IIM)11. Independent Director – Chairman Nominee (could be from IIT with electrical engineering)12. Independent Director- Chairman Nominee (Private individual as an expert in ThermalEnergy)

3. The board should follow company law based governance practices about meetings,

reporting etc. Since it is expected that government of UP may be less willing to put

equity, the outside sources like capital markets , beside tapping PFC and banks, it is

imperative that disclosure and transparency norms be followed based on world-wide

good governance perspectives. Therefore there is a need to constitute following Board

level committees.

1. Four member Board audit committee – examines probity of financial decision

making

2. Four member committee on Compensation of top management

3. Three member Human Resource Management Committee

4. Four member Committee on Ethics, Social responsibility and Environment

These committees by necessity should have senior executive from inside and one

expert from outside (independent director).

Investment management

The investment management require that the per unit revenue is higher than per unit

cost and cover the cost of capital. In the past the corporations and been making losses

with accumulative losses amounting to almost Rs. 585.7 crore as on 31st March 2010

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and almost 360 days receivables incurring severe interest losses besides operational

losses. Both these losses must be brought under control. In addition the corporation

has to worry about the funding required for sustainability and growth.

Financial projections

Considering the costs incurred in the current projects of UPRVUNL, the average cost

per megawatt for UPRVUNL is calculated.

1. However this cost is significantly higher than those incurred by private sector

and other governments. Adani’s super critical power plant (Mundra TPS

Kutch) in Gujarat has an estimated cost of Rs. 4.35 Cr/ MW whereas Essar has

been able to achieve Rs. 4.04 Cr/ MW for Salaya TPP (Jamnagar) by

procuring BTG from Harbin Power Equipment Company, China. We make

below the financial projections required for future investments.

Employee Welfare

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Employees are the greatest resource of any organization, especially if they are

considered the source of competitive advantage. The developmental needs of

employees on the job must be seriously considered and their socio-psychological

needs beside physical comfort. The working

Environment should have hazard free and physically comfortable working ambience

especially in plants. Medical facilities, recreation needs and religious and social needs

may be considered with very clear policy and programmes.

Corporate Social Responsibility

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1. Most organizations including power utilities have incorporated some polices and

Programmers’ to respond to stakeholders other than those directly involved in

business and the physical environment. UPRVUNL does not seem to have any

explicit policy or program or at the most reactive response. There is a need to be pro-

active in this important area of corporate involvement. One issue is the displacement

of people due to acquisition of land or water accessibility to the plant or railway line

to carry raw material and waste. The other is the impact of operations on the quality

of air and water and on the lives of the people, their institutions, social and physical

infrastructure. The third is the yawning gap between the national objectives in the

areas of education, health and employment.

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CHAPTER – 2Research

Methodology

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DEFINE RESEARCH:-

Research in common parlance refers to a search for knowledge.

According to The Advanced Learner’s Dictionary of Current English “Research is a

careful investigation or inquiry especially through search for new facts in any

branch of knowledge”.

Research is a procedure of logical and systematic application of the fundamentals of

science to the general and overall questions of a study and scientific technique by

which provide precise tolls, specific procedures and technical, rather than

philosophical means for getting and ordering the data prior to their logical analysis

and manipulation.

Different type of research designs is available depending upon the nature of research

project, availability of able manpower and circumstances.

Redman and Mory define research as “a systematized effort to gain new

knowledge.”

We all possess the vital instinct of inquisitiveness for, when the unknown confronts

us, we wonder and our inquisitiveness makes us probe and attain full and fuller

understanding of the unknown. This inquisitiveness is the mother of all knowledge

and the method, which man employs for obtaining the knowledge of whatever the

unknown, can be termed as Research.

Research refers to a search for knowledge. It can be defined as a scientific and

systematic search for pertinent information on a specific topic.

.

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RESEARCH METHODOLOGY

It is a way to systematically solve the research problem. It may be understood

as Science of studying how research is done scientifically. In it we study the

various steps that are generally adopted by the researcher in studying his

research problem along with the logic behind them. In general methodology is

an optional framework within which the facts are placed so that the meaning

may be seen more clearly. The sources of data shown that designing of a

research plan calls for decision on the data sources are research approaches

(primary and secondary data) research instruments (observation survey

experiment) sampling plan and contact methods (personal interviews).

RESEARCH DESIGN

Research is a “fact finding investigation with adequate interpretation”.

The data serves as the bases for analysis. Without an analysis of factual data no

specific inferences can be drawn on the questions under study. Inferences based on

imagination or guesswork cannot provide correct answers to research questions. The

relevance, adequacy and reliability of data determine the quality of a study.

For the purpose of this present study data from two sources collected namely primary

and secondary data have to be gathered.

Research designs used in the specific study includes the followings:

Identification the statement of problem.

Collection of company’s specific literature i.e. annual report for the study

period and profile of the company.

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Scanning through standard book to understand the theory behind the export

analysis.

Collection of information from various journals to understands the industrial

background of the study.

Study period in this case is 3 years i.e. from 2009-10 to 2011-12

TYPE OF RESEARCH

In this project Descriptive Research has been used.

Descriptive Research:

This is kind of research structure which is concerned with describing

the characteristics of the problem. In this way the main purpose of such

a research design is to present a descriptive picture about the marketing

problem on the basis of actual facts. For this it is important to obtain

the complete and actual information about the subjects.

It attempts to describe systematically a situation, problem, phenomenon,

service or programme, or provides information about , say, living condition of

a community, or describes attitudes towards an issue.

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DATA COLLECTION METHOD:-

Data refers to the facts, figures and other relevant materials, past & present, serving

as basis for they study & analysis. The sources of data are varied. It depends upon the

nature of the study.

PRIMARY DATA

It is first hand data, which is collected by researcher itself. Primary data is collected

by various approaches so as to get a precise, accurate, realistic and relevant data. The

main tool in gathering primary data was investigation and observation. It was

achieved by a direct approach and observation from the officials of the company.

SECONDARY DATA

Secondary data will be collected from the financial reports issued by the company.

Much information will be collected from companies’ website where the financial

report is published and some information from newspaper and magazines.

This is related to collect the required information about the study. My source of

information is the data available with the company by ongoing through the annual

reports. The study basically relies on secondary data supplied by the company. The

primary data used for this study consists of informal discussion, interview with the

account officer of the company.

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TYPE OF DATA USED IN THE STUDY 

The required data for the study are basically secondary in nature and the data are

collected from:

The audited reports of the company.

INTERNET – which includes required financial data collected form

UPRVUNL official website i.e. www.uprvunl.org and some other websites on

the internet for the purpose of getting all the required financial data of the

company and to get detailed knowledge about UPRVUNL for the

convenience of study.

Direct interaction with Accounts Officer (Mr. DEVENDRA KUMAR

SHUKLA) and employee of the CENTRAL PAYMENT AND ACCOUNT

DIVISION department of the company.

The valuable cooperation extended by staff members of Central Payment and

Account Division department of the company Obra Power Plant, contributed

a lot to fulfill the requirements in the collection of data in order to complete

the project.

PLAN OF ANALYSIS

The data received are tabulated and analyzes for logical statement using statistical.

Methods like Microsoft Excel etc.

Most of analyzed data are converted to percentage to facilitate easily interpretation of

data and the same is analyzed and interpreted in the form of table and represented in

the form of graph.

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CHAPTER – 3Data Analysis

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UPRVUNL After analyzing the P/L accounts of UPRVUNL for the financial year 2010-11, 2009-

10 and compiling the general expenses, can be seen in the below shown table.

UPRVUNL 2010-11Percentage 2010-11 2009-10 Percentage

2009-10

% DIFFERENCE

Generation Of Power(Fuel)

33,774,993,254.00 70.6765 35,692,415,084 70.7731 0.0965

Employee Cost 4,766,046,380.00 9.9732 4,186,493,579 8.3012 -1.6720Repairs And Maintenance 3,805,322,075.00 7.9629 2,706,074,277 5.3657 -2.5971Administrative and General Expenses 894,447,260.00 1.8716 754,754,555 1.4965 -0.3751Provisions Of Bad & Doubtful Debts 39,335,216.00 0.0823 157,392,195 0.3120 0.2297Interest & Financial Charges 2,844,665,323.00 5.9526 2,988,769,277 5.9263 -0.0263

Depreciation 1,663,294,725.00 3.4805 3,946,267,031 7.824 4.3443

TOTAL 47,788,104,233.00 100 50,432,165,998 100 0

From the above mentioned data we can find some of the basic differences b/w the two

consecutive years, which are:

1. Employee cost has been increased by 1.672%. Which means employees

are been paid more and there are more recruitments and retirements

made in the current year.

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2. Repair and maintenance cost is been increased by 2.597% it implies

that the machines had completed their life time & requires more

maintenance day by day.

3. It is been analyzed that the depreciation cost had been decreased by

Rs. 2,28,29,72,306.00 by 4.3443% which clearly shows that the

fixed assets have been recovered to a great extent.

4. Employee cost had been noticed an increase of 1.672% which

indicates clearly that there are more recruitments and retirements in

comparison with the previous financial year.

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NTPC NTPC Limited (formerly National Thermal Power Corporation) is the largest Indian

state-owned electric utilities company based in New Delhi, India. It is listed in Forbes

Global 2000 for 2012 ranked at 337th in the world. It is an Indian public sector

company listed on the Bombay Stock Exchange in which at present the Government

of India holds 84.5% (after divestment of the stake by Indian government on 19

October 2009) of its equity. With an electric power generating capacity of 41,184

MW, NTPC has embarked on plans to become a 128,000 MW company by 2032. It

was founded on 7 November 1975.

On 21 May 2010, NTPC was conferred Maharatna status by the Union Government of

India.

NTPC's core business is engineering, construction and operation of power generating

plants and providing consultancy to power utilities in India and abroad.

The total installed capacity of the company is 41,184 MW (including JVs) with 16

coal-based and seven gas-based stations, located across the country. In addition under

JVs (joint ventures), six stations are coal-based, and another station uses

naphtha/LNG as fuel. By 2017, the power generation portfolio is expected to have a

diversified fuel mix with coal-based capacity of around 31,855 MW, 3,955 MW

through gas, 1,328 MW through hydro generation, about 1,400 MW from nuclear

sources and around 1,000 MW from Renewable Energy Sources (RES). NTPC has

adopted a multi-pronged growth strategy which includes capacity addition through

green field projects, expansion of existing stations, joint ventures, subsidiaries and

takeover of stations.

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NTPC has been operating its plants at high efficiency levels. Although the company

has 19% of the total national capacity it contributes 29% of total power generation

due to its focus on high efficiency. NTPC’s share at 31 Mar 2001 of the total installed

capacity of the country was 24.51% and it generated 29.68% of the power of the

country in 2008–09. Every fourth home in India is lit by NTPC. As at 31 Mar 2011

NTPC's share of the country's total installed capacity is 17.18% and it generated

27.4% of the power generation of the country in 2010–11. NTPC is lighting every

third bulb in India. 170.88BU of electricity was produced by its stations in the

financial year 2005–2006. The Net Profit after Tax on 31 March 2006 was 58.202

billion. Net profit after tax for the quarter ended 30 June 2006 was 15.528 billion,

which is 18.65% more than that for the same quarter in the previous financial year. It

is listed in Forbes Global 2000, for 2011 ranked it 348th in the world.

UPRVUNL UPRVUNL 2010-11

UPRVUNL % 2010-11 NTPC NTPC 2010-

11NTPC % 2010-11

% DIFFERENCE

Generation Of Power (Fuel) 33,77,49,93,254.00

70.68 Generation Of Power (Fuel) 2,94,628.00 76.6479 5.97

Employee Cost 4,76,60,46,380.00 9.97 Employee Cost 24,124.00 6.2759 -3.70

Generation, administration & other expenses

4,69,97,69,335.00 9.83

Generation, administration & other expenses

20,940.00 5.4475 -4.39

Interest & Financial Charges 2,84,46,65,323.00

5.95Interest & Finance charge

18,089.00 4.7058 -1.25

Provisions Of Bad & Doubtful Debts 3,93,35,216.00

0.08

Provisions Of Bad & Doubtful Debts

109.00 0.0283 -0.05

Depreciation1,66,32,94,725.00

3.48 Depreciation 26,501.00 6.8942 3.41

TOTAL 47,78,81,04,233.00 100.00 TOTAL 3,84,391.00 100 0.00

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From the above mentioned data we can find some of the basic differences b/w the

performance of two companies, which are:

1. The fuel cost as a percentage of total cost of UPRVUNL is 5.97% percentage

point less than NTPC. Here from the diagram it is evident that the total percent

of fuel cost out of total cost of UPRVUNL is 76.68% where the fuel cost of

the total cost of NTPC is 76.647%.

2. NTPC is more benefitted in employee cost expense as UPRVUNL has more

cost expense.

3. Generation, administration & other expenses of UPRVUNL are just double of

NTPC's expense. Which concludes that both the human as well as mechanical

machinery of UPRVUNL is less effective as compared to NTPC?

4. In such case depreciation charged by NTPC Is double than UPRVUNL which

should be increased as it would lead to help in adapting new technology and

reduce the cost of production.

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From the above displayed diagrams showing the expenses of the two concerns it can be concluded that:

The Generation, administration & other expenses as a percentage of total cost

of UPRVUNL is 4.39% percentage point more than NTPC. Here from the

diagram it is evident that the total percent of Generation, administration &

other expenses out of total cost of UPRVUNL is 9.83% where the Generation,

administration & other expenses of the total cost of NTPC is 5.44%.

The Employee Cost as a percentage of total cost of UPRVUNL is 3.70%

percentage point more than NTPC. Here from the diagram it is evident that the

total percent of Employee Cost out of total cost of UPRVUNL is 9.97% where

the Employee Cost of the total cost of NTPC is 6.2759%, which indicates that

might there are some of the old employees and some of the pensioners which

draws high salaries, resulting in much burden on the overall manufacturing

cost for the company.

The Interest & Financial Charges as a percentage of total cost of UPRVUNL

is 1.25% percentage point more than NTPC. Here from the diagram it is

evident that the total percent of Interest & Financial Charges out of total cost

of UPRVUNL is 5.95% where the Interest & Financial Charges of the total

cost of NTPC is 4.7058%, which shows that the UPRVUNL have more credit

to be paid to its creditors as compared to NTPC.

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GUJRAT STATE ELECTRICITYCORPORATION LIMITED

Gujarat State Electricity Corporation Limited (GSECL) was incorporated in August

1993 and is registered under the Companies Act, 1956 with the objectives to initiate a

process of restructuring of Power Sector and to mobilize resources from the market

for adding to the generating capacity of the State and improving the quality and cost

of existing generation. The Company was promoted by erstwhile Gujarat Electricity

Board (GEB) as it’s wholly owned subsidiary in the context of liberalization and as a

part of efforts towards restructuring of the Power Sector. The Memorandum and

Articles of Association of GSECL envisage a wide spectrum of activities to improve

the electricity infrastructure of Gujarat. GSECL has initiated its activities in the field

of Generation of Power.

Installed capacity of the State has increased from 315 MW in 1960-61 to 13144 MW

in 2010-2011. Per capita consumption of power in the State of Gujarat in 2009-10

was 1491 Units

The Government of Gujarat (GoG) has also given to the GSECL the status of

Independent Power Producer (IPP) with approval to undertake new power projects.

The Company commenced its commercial operation in the year 1998. However, the

operations of GSECL were limited to Power Stations units Gandhinagar 5,

Wanakbori 7, Utran GBPS & Dhuvaran CCPP till the complete unbundling of

erstwhile GEB was undertaken, i.e. up to 31st March 2005.

As a part of the reform process, the Government of Gujarat has unbundled the various

functions of GEB. As a result of this unbundling, Gujarat State Electricity

Corporation Limited (GSECL) has taken up the responsibility of electricity

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generation. Electricity Transmission has been entrusted to the already existing

company - GETCO. Distribution network in the state has been split up among four

distribution companies, which cater to the northern, central, southern, and western

parts of the state respectively. All these companies have been structured as

subsidiaries of a holding company, Gujarat Urja Vikas Nigam Limited (GUVNL).

GUVNL is also the single bulk buyer in the state as well as the bulk supplier to

distribution companies. It will also carry out the trading function in the state.

UPRVUNL 2010-11

UPRVUNL % 2010-11 GSECL

2010-11

GUJRAT % 2009-10

% DIFFERENCE

Generation and Other cost 33,77,49,93,254.00 70.73 Generation and

Other cost 6,18,064.42 80.865 10.13

Employee Cost, Generation, administration & other expenses

9,46,58,15,715.00 19.82

Employee Cost, Generation, administration & other expenses 45,380.49 5.937 -13.89

Interest & Financial Charges 2,84,46,65,323.00

5.96Interest & Financial Charges 42,907.19 5.613 -0.34

Depreciation 1,66,32,94,725.00 3.48 Depreciation 57,955.23 7.582 4.10

TOTAL 47,74,87,69,017.00

100.00 TOTAL 7,64,307.33 100 0.00

From the above mentioned data we can find some of the basic differences b/w the

performance of two companies, which are:

1. The generation and other cost as a percentage of total cost of UPRVUNL is

10.13% percentage point less than GSECL. Here from the diagram it is

evident that the total percent of fuel cost out of total cost of UPRVUNL is

70.73% where the fuel cost of the total cost of GSECL is 80.865%. But

UPRVUNL should be more conscious in reducing more generation cost by

adapting modern techniques.

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2. Due to the time scale promotions of unskilled old staff on higher positions

there can be noticed a huge difference of 13.89% in Employee Cost,

Generation, administration & other expenses, which effects a lot on the overall

production.

3. We can easily notice that the depreciation cost is 4.10% less of UPRVUNL in

comparison with GSECL hence it is recommended to UPRVUNL that to make

some efforts to increase the reserves for depreciation as it would lead to help

in adapting new techniques of production.

ANDHRA PRADESH POWER GENERATION CORPORATION

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The Power Generating company of Andhra Pradesh

Installed Capacity 8924.9 MW

Third Largest Power Utility in India

APGENCO's Hydel Installed Capacity

Second Highest in India

Andhra Pradesh Power Generation Corporation Limited is one of the pivotal

organizations of Andhra Pradesh, engaged in the business of Power generation. Apart

from operation & Maintenance of the power plants it has undertaken the execution of

the ongoing & new power projects scheduled under capacity addition programme and

is taking up renovation & modernization works of the old power stations.

APGENCO came into existence on 28.12.1998 and commenced operations from

01.02.1999. This was a sequel to Governments reforms in Power Sector to unbundle

the activities relating to Generation, Transmission and Distribution of Power. All the

Generating Stations owned by erstwhile APSEB were transferred to the control of

APGENCO.

The installed capacity of APGENCO as on 31.12.2011 is 8924.9 MW comprising

5092.50 MW Thermal, 3829.40 MW Hydro , 2 MW Wind power stations and ,1.0

MW Photo Voltaic Cell based Solar Power plant ,contributes about half the total

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Energy Requirement of Andhra Pradesh. APGENCO is third largest power generating

utility in the Country next to NTPC and Maharashtra. It's installed Hydro capacity of

3829.4 MW is the second highest among all power utilities in the Country.

APGENCO has an equity base of Rs.2107 corers and about 11,000 dedicated

employees as on 31.03.2011.The company has an asset base of approximately

Rs.27690 corers.

UPRVUNL 2010-11

UPRVUNL % 2010-11

APGENCO

2010-11

APGENCO % 2009-10

% DIFFERENCE

Generation Of Power(Fuel) 33,77,49,93,254.00

70.68 Generation Of Power(Fuel) 4,64,190.33 54.1008 -16.58

Employee Cost, Generation, administration & other expenses 9,50,51,50,931.00

19.89

Employee Cost, Generation, administration & other expenses 1,59,177.54 18.552 -1.34

Interest & Financial Charges 2,84,46,65,323.00

5.95Interest & Financial Charges 1,36,922.96 15.958 10.01

Depreciation 1,66,32,94,725.00 3.48 Depreciation 97,718.59 11.389 7.91

TOTAL 47,78,81,04,233.00 100.00 TOTAL 8,58,009.42 100 0.00

From the above mentioned data we can find some of the basic differences b/w the

Performance of two companies, which are:

1. The generation and other cost as a percentage of total cost of UPRVUNL is

16.58% percentage point more than APGENCO. Here from the diagram it is

evident that the total percent of fuel cost out of total cost of UPRVUNL is

70.68% where the fuel cost of the total cost of APGENCO is 54.1008%.

Hence UPRVUNL should make some efforts likewise APGENCO to decrease

the fuel cost by adapting modern machinery, good quality of coal etc.

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2. Interest & Financial Charges of the total cost of UPRVUNL is 10.01%

percentage point less than APGENCO. So it can be concluded that UP govt.

might had given some extra financial aid to UPRVUNL in comparison with

AP govt. So they should try to utilize the benefits for the betterment.

3. The UPRVUNL should try to increase the reserves for depreciation as this

would help the organization to adapt new technology and much burden would

not be levied.

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From the above displayed diagrams showing the expenses of the two concerns it can be concluded that:

The Depreciation cost as a percentage of total cost of UPRVUNL is 3.48%

percentage point less than APGENCO. Here from the diagram it is evident

that the total percent of Depreciation cost out of total cost of UPRVUNL is

3.48% where the Depreciation cost of the total cost of APGENCO is

11.389%. Which should be increased as this would help the organization to

adapt new technology and much burden would not be levied.

The Interest & Financial Charges as a percentage of total cost of UPRVUNL

is 10.01% percentage point less than APGENCO. Here from the diagram it is

evident that the total percent of Interest & Financial Charges out of total cost

of UPRVUNL is 5.95% where the Interest & Financial Charges of the total

cost of APGENCO is 15.958%, which shows that the UPRVUNL have less

credit to be paid to its creditors as compared to APGENCO. Which a good

indication is for the company as compared from the other one.

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STATEMENT SHOWING COST OF GENERATION OF POWER FOR OBRA ‘A’ TPS

S. No Particulars Quantity

Rate (Rs. Per Unit)

Amount (Rupees)

Cost per unit (Rupees)

(2011-12)Current /year

1st Previous Year

2nd Previous Year

1Material / Fuel CostDIRECT MATERIAL COST

(a) Coal625303.73 1962.3 1227012753 1.92 1.86 1.63

(b) Furnace Oil 2452.62 38001 93201375.67 0.15 0.35 0.32(c) High Speed Oil 196.31 31553 6193985.33 0.01 0.01 0Total Material / Fuel Cost 627952.7 2112.3 1326408114 2.1 2.22 1.95

2 UtilitiesWater Treatment Plant 248331 109.3 27141772 0.04 0.04 0

Cooling123003014 0.12 14691470 0.02 0.04 0.02

Coal Handling Plant 625304 119.16 74513062 0.12 0.15 0.02Total Utilities (WTP+COOL+CHP) 116346304 0.2 0.23 0.05

3Direct Employees cost 209956195 0.33 0.33 0.41

4

Consumables Stores and Spares 31123971 0.05 0.02 0.02

5Repairs and Maintenance 97184383 0.15 0.25 0.04

6 Insurance 663709 0 0 07 Ash handling 1182600 2.89 3421278 0.01 0 0

8Depreciation or Amortization 205122190 0.32 0.21 0.18

9Other Plant Overheads 733915268 1.15 0.43 0.1

10Administrative Overhead 136528002.7 0.21 0.17 0.3

11 Total (1 to 10) 2860669414 4.5 3.86 3.0412 Cost of Sales 2860669414 4.5 3.86 3.04

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From the above displayed bar diagrams showing the change in expenses of the company it can be concluded that:

It can be seen that there is a gradual decrease of 10.76% percentage point of

total cost of the coal expense from the year of 2009-10 to 2011-12. This

clearly indicates that the overall per unit cost of production has been shifted

from coal to the other expenses responsible for production.

The contribution of furnace oil in the per unit cost of production is been

decreased by 7.17% percentage point of the total cost, from10.5% of the

percentage point to 3.34% percentage point. Indicating on the good use of

coal in the plant.

It has been seen that the Other Plant Overheads as a percentage of total per unit

cost of OBRA is 23.38% percentage point more in the year of 2011-12 as

compared to 2009-10.

After the analysis of the cost sheet the contribution of direct material cost in per unit cost of

production of the plant gives some idea in the analyzing the of performance of power plant.. Some of the

concluded points are:

1) The expenses of coal had shown a gradual increased after analyzing the contribution of coal in

per unit cost of production. This indicates that the quality of coal is in declining stage day by day,

and machines are also not so much effective than previous years.

2) From the two diagrams it can be noticed that there is an increase in contribution of per unit cost

of production, from Rs. 1.63 to 1.92 but there is a decrease in percentage contribution of total

cost of coal, from 53.6% to 42.8%.

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.

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SUGGESTION &

RECOMMENDATION

The environment for OBRA ‘A’TPS looks good because of very high demand for

electricity for which deficit would last for next 6-7 years. Managing ongoing and new

projects is critical to benefit from the market demand. The plant has enough

experience in implementing the project, but the equipment supplies and receivables

had been major concerns.

One of the strongest points is the established business and early mover advantage for

OBRA ‘A’TPS in the State of Uttar Pradesh with deeper technical processes like the

design and development; erection and commissioning with very experienced people

with about 1382 MW capacity.

The very strengths are converting into debilitating liabilities. The plant is ageing; the

people have become somewhat complacent with obsolescing skills with increasing

burden of wages and inefficiencies resulting into not so good financial performance.

The non-cooperative suppliers, increasing competition are threatening the financial

health of the corporation.

The plant needs to handle some of these critical problems.

I suggest that to reduce monopoly power of suppliers like BHEL, the plant needs to

diversify BTG supplier base with internationally recognized and cheaper vendors

especially from China. The coal supply chain needs to be further smoothened and

internal project teams are constituted with capable/ well trained people in project

management skills and technical capabilities. Sadly the experienced managers and the

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top management in spite of being highly committed to the physical and financial

progress have not been able to reach performance levels that were targeted.

Therefore the whole organization needs to be revamped: corporate and plant

structures, organizational cadres, re-allocation of employees to right jobs,

strengthening project management and building new capabilities for larger sized

projects, get off from up rating unit to new unit at the same premises, except those

unit which can give services at least for next 15 years with PLF above 60%,

benchmarked auxiliary consumption, reduced outages, SHR, cost per unit. The

regulator cannot perpetually fund the inefficiently generated power by compensating

with higher tariffs. The competitive pressure will be felt immediately after the supply

deficit is overcome.

Each of the ten areas recommended must be worked upon if the management needs to

reach its desired vision and meet it mission commitments:

Managing dynamic environment,

Balancing business portfolio,

Smoothening supply chain,

Operations including project management,

Human resource management,

Organizational restructuring,

Board of Directors, and investment management,

Employee welfare and corporate social responsibility.

There is need to establish the environmental intelligence group assisting both in

operations, strategic areas like new investment, divestment, closure etc to help make

more discipline decisions.

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Balancing business portfolio

Although O&M, R&M and refurbishment will remain important areas given more

than average aging plants, however the investment should shift towards new projects

due to better economy and better market control. Retirement of many aging units may

be a wise strategy.

Smoothening Supply chain

The most critical aspect here is the BTG and BOP timely supplies. Diversified vendor

base will help timely commissioning of projects. In case of contractual failures

penalty clause should be enforced on undue delays. The coal and oil supply chains

must be studied for better efficiencies and environmental compliance perspective.

Operations including project management

Here the most critical area is to build critical project management competencies and

Empowered structural positions of project management teams. Operational

benchmarks as targets are pursued vigorously through well designed organizational

structures, clear accountability and incentive systems. ERP and IT project should be

implemented at faster speed to derive returns from this investment.

Human resource management

This being the only source of competitive advantage enough resources must be

diverted towards training and development with at 3% budget of revenue dedicated to

training and development for the employees. The cadre restructuring should be done

keeping in mind that the internal environment is enabling and empowering with

adequate responsibility and accountability.

Investment management

Emphasis should be placed on profitability and more internal generation of funds for

investment in future projects, without perpetually depending on the UP Government.

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This is necessary especially in future if capital markets were to be tapped. By 2017 it

should acquire financial autonomy. It is necessary the government continue funding

until then and it should issue bonds to fund investment against receivables from its

customers.

Employee Welfare

Employees are the greatest resource of any organization, especially if they are

considered the source of competitive advantage. The developmental needs of

employees on the job must be seriously considered and their socio-psychological

needs beside physical comfort. The working environment should have hazard free and

physically comfortable working ambience especially in plants. Medical facilities,

recreation needs and religious and social needs may be considered with very clear

policy and programmes.

It is suggested that if the above areas are successfully navigated the plant has the

potential to meet its vision and mission spirit.

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BIBLIOGRAPHY

Following sources have been sought for the preparation of this report

1. BOOKS AND ARTICLES Pandey IM – Financial Management ( Vikas, 2004, 9th Ed.).

Ravi M. Kishor – Financial Management (Taxman, 1st Ed.).

Kothari, C.R., Research Methods-Methods and Techniques,1989,New

Delhi:Wiley Eastern Limited,4835/24 Ansari Road, Daryaganj, New Delhi

110 006.

Pandey I M Research Methodology Methods & Techniques (New Age

International Publishers, 2004, 2nd Ed.).

2. Direct interaction with Accounts Officer (Mr. DEVENDRA KUMAR

SUKLA) and employee of the CENTRAL PAYMENT AND ACCOUNT

DIVISION department of the company.

3. WEBSITES-

http://www.uprvunl.org/obra.htm

http://www.uprvunl.org/pdf/Finance/Balance%20Sheet

%202011-12.pdf

http://www.uprvunl.org/pdf/Finance/Balance%20Sheet

%202010-11.pdf

http://www.uprvunl.org/pdf/corporate_plan/Corporate

%20Plan%202012-2017.pdf