India - Second Korba Thermal Power Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 3397a-IN INDIA SECOND KORBA THERMAL POWER PROJECT STAFF APPRAISAL REPORT June 3, 1981 Regional Projects Department South Asia Projects This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = Rupee (Rs) Rs I = Paise 100 US$1 - Rs 8 l/ Rs 1 US$0.125 1/ Rs 1 million = US$125,000 1/ MEASURES AND EQUIVALENTS 1 Kilometer (km) = 1,000 meters (m) = 0.6214 miles (mi) 1 Meter (m) = 39.37 inches (in) 1 Cubic meter (m ) = 1.31 cubic yard (cu yd) = 35.35 cubic feet (ft) 1 Hectare (ha) = 10,000 m = 2.471 acres (ac) 1 Kilogram (kg) = 2.2046 pounds (lb) 1 Ton (t) = 1 metric ton = 2,200 lbs 1 Kilocalorie (kcal) = 3.968 British thermal unit (Btu) 1 Kilovolt (kV) = 1,000 volts (V) 1 Kilovolt-ampere (kVA) = 1,000 volt-amperes (VA) 1 Megawatt (MW) = 1,000 kilowatts (kW) = 1 million watts 1 Gigawatt hour (GWh) = 1,000,000 kilowatt hours ABBREVIATIONS AND ACRONYMS APS - Annual Power Survey BEST - Bombay Electric Supply and Transport Undertaking BHEL - Bharat Heavy Electricals Limited CIF - Cost Insurance Freight CEA - Central Electricity Authority CESC - Calcutta Electric Supply Company CWPC - Central Water and Power Commission DESU - Delhi Electricity Supply Undertaking GEB - Gujarat Electricity Board GOI - Government of India GDP - Gross Domestic Product IDA - International Development Association KfW - Kreditanstalt fuer Wiederaufbau KWU - Kraftwork Union MPEB - Madhya Pradesh Electricity Board MEB - Maharashtra Electricity Board NHPC - National Hydro Power Corporation NTPC National Thermal Power Corporation PERT - Program Evaluation and Review Technique REC - Rural Electrification Corporation Limited REB - Regional Electricity Board SEB - State Electricity Board TDO - Thermal Design Organization TNA - Transient Network Analyser NTPC's FISCAL YEAR (FY) April 1 - March 31 l/ The US$/Rs exchange rate is subject to change. Conversions in this report have been made at US$1 to Rs 8, which represents the projected exchange rate over the disbursement period.  FOR OFFICIAL USE ONLY INDIA SECOND KORBA THERMAL POWER PROJECT STAFF APPRAISAL REPORT Table of Contents Page No. I. THE POWER SECTOR.. 1 Background .......................... I Energy Resources. 1 Past Bank Group Involvement in the Sector . . 4 Sector Institutions. 6 Existing Facilities - All India .. 8 Power Supply/Demand Balance - All India ..9 Future Development - All India ..10 Regional Demand and Supply - Western Region . .12 Future Integrated System Operation . .14 Bank Group's Strategy in the Sector .. 15 It. THE BENEFICIARY - NATIONAL THERMAL POWER CORPORATION LIMITED ...... . ... ........ 20 Legal Status and Authorities ................................ 20 Organization and Management ................................. 21 Training ............................... 22 Sale of Power from the Project ............................. 23 Accounting Organization and Systems ......................... 23 Audit ..... ... 24 III. THE PROGRAM AND THE PROJECT .25 The Program .................. 25 The Project ..................... 25 Estimated Cost ........... ................................... 26 Project Financing ......... .................................. 28 Engineering and Construction ................................ 28 Procurement ............. .................................... 29 Disbursement ........... .................................... 29 Ecological Aspects ......... ................................. 30 Project Risks .............. ....,,,....... 31 IV. FINANCIAL ANALYSIS ., 33 Investment Program .33 Future Earnings .34 Taxation .35 This report has been prepared by Messrs. V. Antonescu, B.C. Lynch and K.G. Jechoutek on the basis of an appraisal conducted in India during missions in October 1980 and January/February 1981. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Table of Contents (continuation) Page No. Internal Cash Gene;ration FYl977-FY1992,,....................,., ,,,.9,, ...., . 35 NTPC's Finanlcing E:La-n FY1982-FY1989,,,,.o..,, ......I... ............... ...... 0....... . ,, 36 Future Finances ........... .............. 38 Debt/Equity Ratio.....................................39 Borrowing Powers. ..... ................................... 40 Commercial Arrangements for Sale of NTPC Energy .............. 40 V. JUSTIFICATION .... . ...... e 41 General .......................*bbe