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NTPC and Power Grid to form pan-India power distribution firm in an equal JV

Power News - Published on Thu, 14 Mar 2019

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Live Mint reported that state run NTPC Ltd and Power Grid Corp. of India Ltd may shortly set up the National Electricity Distribution Company a pan-India power distribution firm in an equal joint venture, said government officials aware of the development. The new public sector unit will focus on aggregating electricity demand in the country and cater to it and may also take over weak electricity distribution utilities. It will comprise of cadre on deputation from other public sector units and is being set up at a time when the state owned distribution companies (discoms) are struggling with their finances on account of losses and borrowings. In such a situation, a national electricity distribution company can procure electricity at competitive rates and help address the issue of stressed assets in power generation.

A government official cited above requesting anonymity said that “The contours of NCDC have been discussed upon and it will be set up by NTPC and PGCIL as a 50:50 JV.”

The distribution utilities have been beleaguered by issues such as low collection, increase in power purchase cost, inadequate electricity tariff hike, inadequate subsidy disbursement, and increasing government department dues. In turn, the poor payment records of discoms have not only adversely affected power generation companies, but has contributed in causing stress in the banking sector as well.

The plan is to set NCDC up along the lines of Energy Efficiency Services Ltd which is under the administrative control of the power ministry. EESL is an energy services company, jointly operated by four state run firms—NTPC Ltd, Power Finance Corporation, Rural Electrification Corporation and Power Grid Corp. of India Ltd.

Bloomberg news wire agency on 26 February reported about NTPC and PGCIL being roped in for setting up the National Electricity Distribution Company (NCDC).

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Posted By : Rabi Wangkhem on Thu, 14 Mar 2019
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