ankit project
TRANSCRIPT
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
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
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
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
INDUSTRY PROFILE
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.
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%.
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.
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.
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
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.
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;
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
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).
"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.
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
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.
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);
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).
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
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
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
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
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
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
Budge Budge Thermal Power Plant CESC Achipur
West Bengal 3 x 250 750
Titagarh Thermal Power Station CESC
West Bengal 4 x 60 240
CESC Southern Generating Station CESC
West Bengal 3 x 67.5 135
Jojobera TPP Tata Jojobera Jharkhand3 x 120,1x67.5 427.5
Jharsuguda TPP Vedanta Jharsuguda Orissa 4x600 2400Vedanta Aluminim CPP Vedanta Jharsuguda Orissa 9x135 1215Essar Power Gujarat Ltd. Essar Power Jamnagar Gujarat 2X600 1200Total 102 114182
OBJECTIVEOF
STUDY
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.
IntroductionTo
Company
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.
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%.
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.
• 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.
• 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.
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
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.
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.
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.
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.
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.
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
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.
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 .
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,
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”
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
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.
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
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
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
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
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
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
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.
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.
.
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.
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
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
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
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.
CHAPTER – 2Research
Methodology
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.
.
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.
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.
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.
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.
CHAPTER – 3Data Analysis
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.
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.
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.
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
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.
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.
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
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.
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
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
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.
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.
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.
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
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%.
.
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
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.
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.
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.
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
http://www.ntpc.co.in/index.php?
option=com_content&view=article&id=42&Itemid=75&lang=e
n
http://www.ntpc.co.in/index.php?
option=com_content&view=article&id=28&Itemid=41&lang=e
n
http://www.apgenco.gov.in/inner.asp?frm=corporate_profile
http://www.gsecl.in/profile.php
http://en.wikipedia.org/wiki/Electricity_sector_in_India