NTPC not to suffer Rs 30,000 cr loss: Govt
NTPC will not suffer Rs 30,000 crore loss if it was to get natural gas at prices higher than those committed by Reliance Industries five years ago, the government says.
New Delhi, Dec 17 (PTI) State-run NTPC will not suffer Rs 30,000 crore loss if it was to get natural gas at prices higher than those committed by Reliance Industries five years ago, the Power Ministry has told Parliament.
"There is no loss to NTPC on account of fuel cost as the fuel cost is a pass-through to beneficiaries (customers)," Minister of State for Power Bharatsinh Solanki said in a written reply to the Rajya Sabha.
NTPC had taken RIL to court seeking implementation of the Mukesh Ambani-run firm`s 2004 bid to supply 12 mmscmd of gas at USD 2.34 per mmBtu for 17 years.
"NTPC`s tariff is determined by Central Electricity Regulatory Commission (CERC). As per the regulation for fixing the tariff under the Electricity Act 2003, the fuel cost (price of gas) is a pass-through to beneficiary states/union territories who in turn realise this from consumers," he said.
M V Mysura Reddy (TDP) had asked if RIL`s dishonouring of the contract would cause a loss of Rs 30,000 crore to NTPC.
"However, to protect the long term interests of its customers, NTPC always strives to source fuel at the most competitive price," Solanki said.
He said the fuel cost at the delivered price of gas of $3.30 per mmBtu (as per the 2004 tender) works out to Rs 1.07 per unit while the same at the delivered cost of $6.67 per mmBtu (as per Government approved rates for RIL`s KG-D6 gas field) comes to Rs 2.17 per unit
Solanki said NTPC, with the objective of getting gas at the most competitive price, had floated a global tender for sourcing 12 million cubic metres per day of gas for 1300 MW Kawas and 1300 MW Gandhar expansion projects in Gujarat.
RIL bid the lowest and a Letter of Intent (LoI) was placed on RIL for supply of gas at $2.34 per million British thermal unit (prices without taxes and transportation cost) for 17 years.
"Subsequently, RIL sought major changes in Gas Sale and Purchase Agreement (GSPA) in the form of limitation of liability and RIL did not sign the GSPA," he said. "Therefore, NTPC field a suit against RIL in Bombay High Court on December 20, 2005 for specific performance of the contract. The matter is at present sub-judice."
He said the variable cost of power at delivered price of gas of USD 3.30 per mmBtu (derived from the tender bid price) works out to be Rs 1.07 per kilo watt hour (or unit).
The variable cost of power at delivered price of USD 6.67 per mmBtu (considering price of gas at $4.20 per mmBtu at landfall point as fixed by the government for KG-D6) comes to Rs 2.17 per unit.
"The difference in variable cost of power works out to be Rs 1.10 per kwh (or unit)," he added.
NTPC has agreed to take for existing Kawas and Gandhar plants at government approved rates of $4.20 per mmBtu.
"NTPC has signed GSPA (with RIL for these) without prejudice to its suit in Bombay High Court against RIL," he added.