Docunent of TheWorldBankl USE ONLY FOR OFFMCIAL ReportNo. 8641 PROJECT COMPLETIONREPORT INDIA RAMAGUNDAM THERMALPOWERPROJECT (CREDIT 874-IN AND LOAN 1648-IN) MAY 7, 1990 Transportand Energy OperationsDivision CountryDepartmentIV Asia RegionalOffice This document has a restricted distribution and may be used by recipients only in theperformance of thir offcial duties. Its contents may not otherwise be disclosedwithout WorldBank authorization. Measures and Equivalents 1 Hectare (h) = 1 million square meters = 2.47 acres 1 Kilometer (km) = 1,000 meters (m) 1 Ton (t) 3 1 metric tone - 2,200 lbs. 1 Kilovolt (kV) 3 1000 volts (V) 1 Kilovolt-ampere (kVA) 1,000 volt-amperes (VA) 1 Kilowatt (kW) 1,000 watts (W) 1 Megawatt (MW) 1 million watts 1 Gigawatthour (GWh) = 1,000 kilowatthours (kWh) Abbreviations and Acronyms AC = Alternate Current CEA Central Electricity Authority CAD 3 Computer Added Design CTI = Central Technical Inctitute DAS = Data Acquisition System EIA 3 Environment Impact Assessment GOI - Government of India HVDC = High Voltage Direct Current ICB = International Computer Bidding IERR - Internal Economic Rate of Return LDO = Light Diesel Oil NHPC 8 National Hydro Power Corporation NTPC = National Thermal Power Corporation PCR = Project Completion Report PHI = Power Management Institute REB = Regional Electricity Board REC - Rural Electrification Corporation SCADA Supervisory Control and Data Acquisition SEB = State Electricity Board MPEB 3 Madhya Pradesh State Electricity Board TN[E WORlDBiANKt FoRoMcL. USE ONLY wIsh"ton. DC 20433 U.SA Olk td Oweiv.Cuwal 0tpun tnawu May 7, 1990 MPMflRAND To THE EXECuTIVE DIRECTORSAND THE PRESIDENT SUIJECT: Project Completion Report on India Ramagundam ThermalPowerProject (Credit874-INand Loan 1648-IN) Attached, for information, is a copy of a reportentitled'Project Completion India- Ramagundam Reportorn ThermalPowerProject(Credit874-INand loan 1648-IN)" preparedby the Asia RegionalOffice. No auditof this project has been made by the Operations Evaluation Department at this time. Attachment Thisdocument ha a restfd ditibutin and maybe ued by nxiPent onlyin b peofance of theirofficiadutes Its contentsmaynotothewisebe discled widhut WorldBnk eutbotioan. FOR OMCIL USEONLY REPORT PROJECTCOMPLETION INDIA THERMAL RAMAGUNDAM POWERPROJECT (CREDIT 874-IN and LOAN 1648-IN) TABLE OF CONTENTS Page No. ..................................................... Preface i Basic Data Sheet ............. .ii Highlights.. . .............................................- iv I. ............................................ INTRODUCTION 1 ......................................... Power Subsector 1 .................................. Bank Group Involvement 3 II. PREPARATION PROJECT IDENTIFICATION, ....... AND APPRAISAL 3 Project Origin, Preparation, Appraisal, Negotiations and Approval............................ 3 Project Objective. , ............................. 4 Project Description ,. ............................. 4 III. IMPLEMENTATION...................., 5 Credit and Loan Effectiveness........................... 5 Project Execution....................................... 5 Environment, Resettlement ............ and Rehabilitation 7 Reporting ........................................ 8 Project Cost........................ .................... 8 Procurement ..................... .8 Disbursements . . ........... 9 Performanceof Consultants,Contractors ... and Suppliers 9 IV. OPERATING PERFORMANCE ................................... 9 V. .......................... FINANCIALPERFORMANCE 1..... 1l VI. INSTITUTIONAL ............................... DEVELOPMENT 13 VII. ECONOMIC REVALUATION ... 14 VIII. PERFORMANCEOF THE BORROWERAND THE BANK GROUP.......... 15 IX. .............................................. CONCLUSION 18 Thisdocumenthas a restricteddistributionand may be used by recipientsonly in the performance duties.Its contents may not otherwisebe disclosedwithoutWorldBankauthorization. of theirofficial TABLE OF CONTENTS (Cout.) ANNEXES Page No. 1. Description of Facili tiesOperation ................... in 19 2. Original Program for the Expansion of Genera ting ......... 21 Capacity during Sixth Plan Period 1979180-1983184 ..... 21 3. Description of the Ramagundam Development .. 22 4. Land Acquisition, Resettlement, Environment and Rehabilitation ........ . 24 5. Estimated and Actual Project Costs ...................... . 26 6. Procurement Review ................. . ... .......... ..... 28 7. Estimated and Actual Schedules of Cumulative Disbursements ................. .. .......... 30 8. Highlightsof the Commissioning and Operating Performance of the three 200 MWRamagundam Units ...... 31 9. Forecast and Actual Consolidated Income Statement, FY83-FY88........................... 32 10. Forecast and Actual Consolidated. Balance Sheets, FY83-FY88 . .............. 34 11. Forecast and Actual Consolidated Sources and Applications of Funds Statements, FY83-FY88....... 35 12. Ex-Post Internal Economic Rate of Return ................ 36 ATTACHMENT Coents from the Borrower. ...... ....... ..37 - i - REPORT PROJECT COMPLETION INDIA RAMAGUNDAM THERMAL POWER PROJECT (CREDIT 874-IN and LOAN 1648-IN) PREFACE The Project covered the first phase of the Ramagundam 2,100 MW developmentlocatedin the KarimnagarDistrictof Andhra Pradesh,south of the Godavaririver and in the vicinityof south GodavariCoal fields. It consistsof civil works, three 670 tonnes per hour coal fired boilers, three 200 MW turbo generatingunits, auxiliarymechanicaland electrical works, associated400 kV alternatecurrent (AC) transmission system of 1,069 circuitkms, and severalsubstations. IDA Credit of US$200 million and an IBRD Loan of US$50 million representing 49.OOZ of the total financingrequiredfor the Projectwas made to the Governmentof India in February1979 with the NationalThermal Power Corporation (NTPC)as the beneficiary. With the commissioning of the three units, the Projectwas essentially completedsatisfactorily in December,1984 and the Credit and Loan were closed on 30th June, 1987 followingfinal paymentsafter the successfulcompletionof guaranteeperiod. The project completionreportwas preparedjointlyby NTPC and the Transportand Energy Operations Division (India)of the World Bank on the basis of Staff AppraisalReport No. 2175b-INdated 11th December,1978, the developmentcredit, loan agreementand project agreement,all dated 2nd February,1979 and other relevantdocumentsin Banks Group's file. This PCR was read by the OperationsEvaluationDepartment(OED). The draft PCR was sent to the Borrowerfor commentsand they are attached to the Report (Attachment I). - ii - PROJECT COMPLETION REPORT INDIA RAMAGUNDAM THERMAL POWER PROJECT (CREDIT 874-IN and LOAN 1648-IN) BASIC DATA SHEET Key Project Data Original Actual Project Cost (US$ M) 511 693 Loan Amount (US$ M) 50 50 Credit Amount (US$ M) 200 200 Disbursed (US$ M) 250 250 Cancelled (US$ M) -- -- Repaid (US$ M) -- 13 Outstanding 250 237 Date of completion of physical component 6/84 12/84 Portion completed by target date (2) 100 86.5 Economic rate of return (Z) lox 12.5 Institutional Performance -^ Commendable Cumulative Estimated and Actual Disbursement (US$ M) FY 80 FY 81 FY 82 FY 83 FY 84 FY 85 FY86 FY 87 FY 88 Appraisal estimate 28.0 70.0 164.0 224.0 239.0 246.00 250.0 250.0 250.0 Actual 20.0 28.8 84.4 152.4 186.5 207.5 216.2 243.7 250.0 Actual as X of Estimate 71.4 41.1 51.5 68.0 78.0 84.3 86.5 97.5 100.0 - iii - Other Pro1ect Data Original Item Plan Actual Concept in Bank - 2/75 Negotiation - 12/78 Loan/Credit Signing - 2179 Effectiveness - 5/79 Closing Date 12/85 6/87 Last Disbursement 6186 - 3/88 Beneficiary NationalThermal Power Corporation Ltd. ExecutingAgency NationalThermal Power CorporationLtd. Fiscal year of Borrower April 1 - March 31 Follow-up Project Second Ramagundam Thermal Power Project Loan 2076-IN Mission Data month/ No. of No. of Man Date of Iteml Year T eeks V Persons Weeks Report Pre-Appraisal (ProjectBrief) 1/78 - 2 - 11/77 Appraisal 4/78 - 2 - 12/78 Supervision1 11/78 2 3 6 1/78 Supervision2 12/79 4 1 4 2/80 Supervision3 6/84 3 1 3 8/84 Supervision4 6/85 2 2 4 8/85 Supervision5 10/86 2 2 4 11/86 CurrencyExchangeRate Name of Currency - Rupee (Rs) = 100 paisa (P) Appraisal year (1978 Average) - US$ 1 - Rs. 8.6 Completing year (1987 Average) - US$ 1 - Rs. 13.0 1/ Project performance was monitored by the Bank Group on an on-going basis during the appraisalof subsequentNTPC projectsincludingthe proposedRegionalPower SystemsProject (FY90). - iv - REPORT PROJECTCOMPLETION INDIA RAMAGUNDAM THERMAL POWERPROJECT (CREDIT 874-IN and IOAN 1648-IN) HIGHLIGHTS Loan 1648-IN of US$ 50 million and Credit 374-IN of US$ 200 million was for the implementation of the first phase of the Ramagundam2100 MV development located in KarimnagarDistrictof Andhra Pradesh in the vicinityof the South GodavariCoal field, just near to Pochampadreservoiron the river Godavari. It consistedof civil works, electrical works, mechanicalworks includingthree 670 tonnes per hour boilers and three 200 MW turbo generatingunits as well as an associated400-kV transmissionsystem - around 1,070 km of lines and several substations. The Projectwas the Bank Group's third lendingoperationwith the NTPC, the beneficiaryand the implementing agency. The corporation was established approximately three years prior to this operation,for the purpose of constructingand operatinglarge thermal power projectsin the central sector and distributing power so generatedto the State ElectricityBoards (SEBs). As per the Staff AppraisalReport the projectwas to be completedby June 1984 and the credit and loan closed by December,'4985. However,because of initial delay in the placementof orders for main plant equipmentthe project was not completeduntil December,1984 and the credit and loan were not closed until June 1987 as a result of late retentionpaymentsnotably for spare parts. The Projectwas completedat a cost of Rs. 7,070.7million which is about 611 higher than the originalcost estimateof Rs. 4,395 million. However in US dollarsvalue the actual project cost is estimatedat US$ 693.4 million which is only about 35.7Z higher than the originalesitmateof US$ 511.0 million. The bulk of this increase is due to (i) higher than anticipated increases in the price of equipment and material; (ii) customs duty for which allowances were not made in the appraisalreport; (iii) change in the scope of the project to cover the cost of trial and pre-commissioning procedures; and (iv) changes in the foreign exchangerate. The Project was completed satisfactorily and is generating much needed electricity in the Southern Power Region. Several measures were taken to mitigate the adverse impact on the environment and resettlement of oustees. In additionto completingthe project satisfactorily, NTPC initiatedimprovements on its own accord which are having, and will continueto have, beneficiaryspin- offs. These include a new controland instrumentation package, a contract management system,a rapid coal loading system for unit trains, concept of quality assurances and of design, supply and erection type packaging for auxiliaries, satellite communication system for data and information flows between various projectsand its CorporateOffice, etc. NTPC needs to be commendedfor these initiatives and for completing the construction of the project in almost the identical time as was envisagedby the appraisalreport despite several site related infrastructural constraints. - v - The financialperformance of NTPC has been satisfactory. During FY82-88,the rates of return on averagenet fixed assets in operationhave exceededthe estimatescontainedin the Staff AppraisalReport. NTPC1s debt equity ratio and debt serviceratios have also been satisfactory and at the end of FY88 were 43s57 and 3.9, respectively.NTPC has also increasedsubstantially and diversifiedits resourcemobilization for financingof the future projects. NTPC's collectionof its accountsreceivables during its first six years of operationshowever,has been a growingproblem. In spite of effortsmade by NTPC, the level remainedequal to the equivalentof more than four months sales revenuesat the end of PY88. The Governmentis currentlymaking additional efforts to reduce the level to the equivalentof the sales' revenue of the last two months, as requiredby the Bank's covenantincludedin recent lending operations. Bank Group involvement throughoutthe project and subsequentBank Group operationshave continuedto provideNTPC the impetusand assistanceneeded to assume a substantially larger role in the power sub-sectorthan was envisagedat the time it was established. Bank Group supporthowever will still be needed to enable NTPC to implementits expandedinvestment program and develop into a financially mature utility. In addition,the impact to the sector,through NTPC operationswhich have reducedpower shortages,supportedthe application of new technology, and introduced, althoughnot yet successful, commercialand financialdiscipline, have proven to be more successfulthan previousoperations with centrai institution. PROJECT COMPLETIONREPORT INDIA RAMAGUNDAMTHERMALPOWER PROJECT (CREDIT874-IN and LOAN 1648-IN) I. INTRODUCTION 1.01 Power shortagesof the 1970's and the adverse effect these were having on the productivesectorsof the economy promptedthe Governmentof India (GOI) to intensifyits efforts to balance the demand and supply of electricity. This was to be achievedwithin the context of GOI-os overall strategyfor the energy sectorwhich was formulatedin responseto increase in the international price of oil to reduce the country'sdependenceon importedliquid hydrocarbons and ease the burden on its balance of payments. Accordingly, emphasiswas accordedin the power sub-sectorto Ci) acceleratingthe development of the hydro power potentialand large coal fire power plants at both pithead locationsand in the proximityof load centres;(ii) improvingthe efficiencyof thermalpower plants and reducinglosses in the transmission and distribution networks; (iii)expandingthe rural electrification program;and (iv) strengthening the organizational and managementcapabilities of the State Electricity Boards (SEB's),as well as, augmentingtheir generatingcapacitythrough the increasedinvolvement of the CentralGovernmentin the power sub- sector. The Projectwas formulatedin the context of this strategyand was an integralpart of the power development program of the Sixth Five Year Plan, (FY80-FY85). However,because of the anticipatedlong gestation,it was actuallyinitiatedtowards the end of the Fifth Five Year Plan (FY74-FY79).i/ (Para.2.01) Power Subsector21 1.02 Accordingto the Constitution and the Electricity(Supply)Act, 1948, (the Act), the power subsectoris within the concurrentjurisdiction of the Central and State Governmentsand, until 1974, it involvedthe followingfour agencies:the SEBs, the RegionalElectricityBoards (REBs), the Central Electricity Authority (CEA)and the Rural Electrification Corporation(REC). Under the Act, SEBs were assignedthe responsibility for the generation,transmission and distribution of electricitywithin each state and for the regulationof private licenses. Although SEBs were 1/ The plan was suspendedin FY78. 2/ Data regardingthe supply and consumptionof electricitybetween FY70 and FY75, and a descriptionof the facilitiesin operationas of 1978 when the projectwas appraised,are presentedin Annex 1. -2- supposedto be autonomousin managing their day-to-dayoperations, in practicethey are under the purview of the State Governmentsin such matters as capital investment,tariffs,borrowings, pay and personnel policies. REBs were formed during the period 1964-66 by groupingSEBs into five regionalsystemsto promote coordination. They are also under the purview of the State Governmentsand their coordinating responsibilities include overhauland maintenance programs,general schedules,interstate power transfersand concomitant tariffs. 1.03 The other two agencies, CEA and REC, are under the purview of the CentralGovernment. CEA was established in 1950 in the Power Wing of the CentralWater and Power Commission, the Ministry of Irrigationand Power, to formulatenationalpolicy and coordinatethe activitiesof the various agenciesinvolvedin supplyingelectricity. However,because of institutional con traints,CEA was unable to carry out its mandate fully. REC was established in 1969, to coordinatethe expandingrural electrification program and provide financialas well as technical expertiseto SEBs for their rural schemes. 1.04 The constraints on CEA's ability to carry out its mandate and the ad hoc development of the power subsector,togetherwith the shortagesof electricity ensuing therefrom,inducedGOI to amend the Act to enlarge the scope and functionsof CEA and address the financialoperationsof the SEBs. Legislation was enacted in 1975 to give CEA an effectiveveto over new investments by SEBs. The amendmentalso covered the establishment of generatingcompaniesby the Central and State Governmentsfor the installation of large power stationsto allow for economiesof scale in meeting the forecastgrowth of demand. An ordinanceincorporating the amendmentsto the general provisionsof the Act was issued and two Central Sector generatingcompanies,the NationalThermalPower Corporation(NTPC) - the beneficiary of the Credit - and the NationalHydro Power corporation (NHPC)were established. 1.05 NTPC was registered as a governmentowned company under the Company'sAct, 1956, and is governedby the general provisionsof the Electricity(Supply) Act, 1948, as amended,to give the corporation statutoryrecognition. The initialauthorizedshare capital amountedto Rs. 1250 million (US$ 140 million). NTPC was to be managed by Board of Directorsof not less than 4 and not more than 15, some of whom would be part time. The corporation was established to design,constructand operate large thermalpower stationsin the Central sector, and distribute and sell the power so generatedto the state electricity boards. NTPC also was to own and operate,associated400 kV transmission system, over which power would be distributed and sold in bulk to SEB's. NTPC's original development plan providedfor the construction of four thermalpower stationseach with an ultimatecapacityof about 2,000 MW. (Para. 2.01). At the time of appraisal, work had already startedon the first phase of 600 MW development each for the Projectsand Singrauliand Korba (Credits 685-IN, and 793-IN)while the implementation of a project at Parakka,in West Bengal,was under coasideration. The Projectnow completed was for the developmentof first phase of 600 MW at Ramagundamwith associated400 -3- kV AC transmissionsystem. It was envisagedthat NTPC would also take over the operationof the Governmentowned 300 MW BadarpurPower Stationnear Delhi. 1.06 In 1978, when the projectwas appraised, NTPC had made good progressin buildingup the organization since 1976 by fillingkey positions. A competentadministrator with wide experiencein the formation and development of large industrialundertakings and in the constructionof factoriesand the manufactureof generatingfacilities had been appointed as the Chairmanand ManagingDirector. The Board of Directorshad also been constituted. The principledepartments had been establishedincluding the mechanicaland electricaldesign departments, which togetherformed the plant and equipmentengineering grcip, the civil design and systems engineering departments, which formed the civil and systemsengineering group, and the operationservicesdepartment. The number of staff appointedas on March 31, 1978 was 454. Bank Group Involvements 1.07 Prior to the Project,the Bank had made eight loans to India for power projectsamountingto US$ 284.5 million and IDA ten credits totalling US$ 796 million. Of the total amount,US$ 620.5 million had financedthe construction of generatingplants,US$ 23 million had financedthe purchase of construction equipmentfor the Beas hydro-electric project,US$ 380 millionwas used on projectsfor high voltage transmission, and US$ 57 million was for rural electrification. Nine loans and credits for generating plants, the Beas Project (Credit 89-IN) and the first three Power Transmission Projects (Loan 416-IN, Credits 242-IN and 377-IN) had been completed. The Fourth Transmission Power Project (Credit604-IN)was under implementation; approximately US$ 94 million of the credit amount of US$ 150 million had been committedup to September,1978. The Korba and Trombay Thermal Power Projects (Credit783-IN and Loan 1549-IN), which were approvedin April 1978, were still in preliminary implementation stages. Commitments on November30, 1978 totalledUS$ 104 million on Singrauli Project (Credit685-IN) and US$ 55.2 million on the Rural Electrification Project (Credit 572-IN). 1.08 The ongoinggenerationand transmission power projectsand the rural electrification projectswere proceedingsatisfactorily, notwithstanding initial delays in implementationand in the preparationof specification notably for more sophisticatedload dispatchequipmentin the case of the Fourth Power Transmis3ion Project (Cr. 604-IN). The Singrauli and Korba projectsthough in the early stages of implementation, were also proceedingsatisfactorily.The projectwas the Bank Group'sthird lending operation with NTPC. II. PROJECT IDENTIFICATION, PREPARATION AND APPRAISAL Project Origin, Preparation, Appraisal, Negotiationsand Approval 2.01 program for the power sub- The Sixth Five Year Plan's development sector was projectedon the basis of an average annual increasein the -4- demand for electricity of about lOX between FY80 and FY85. The target for the commissioning of new capacity associated with the load forecast was set at 19,666 MW consisting of 13,846 MW of thermal, 5,130 MW of hydro and 690 MW of nuclear capacity.3/ Most of the thermal capacity was to be coal fired with emphasis on large power stations whose ultimate capacity could reach about 2,000 MW. Feasibility studies for five such developments were completed in 1974. The responsibility for constructing and operating four of these power stations-one at Singrauli in Uttar Pradesh, one at Korba in Madhya Pradesh, one at Ramagundam in Andhra Pradesh and one at Parakka in West Bengal-wtasassigned to NTPC. GOI's formal request for Bank Group assistance in financing the development at Ramagundam, described in Annex 3, was received in January 1987. The development which was to be implemented in two stages consisted of three 200 MW and three 500 MW generating units along with associated 400 kV transmission system for the evacuation of power. The Project consisted of the first phase (three 200 MW units) of this development. 2.02 The Project was prepared by NTPC and appraised by the Bank Group in April/May, 1978 and negotiations were held in Washington in December 1978. As NTPC had made significant progress in strengthening its in-house technical capabilities, during the execution of Singrauli and Korba projects, it was agreed during negotiations that the corporation would prepare the basic engineering and preliminpr: design for the Project and would appoint consultants satisfactory to the Bank to (i) review deviations from earlier power stations designs and (ii) assist NTPC as necessary in the design and preparation of specifications for the power station. NTPC was also to appoint consultants, satisfactory to the Bank, to assist as required in the design and supervision of construction of 400 kV transmission lines. Project Objectives 2.03 The primary objective of the project was to provide NTPC the impetus and assistance needed to assume its envisaged role, including the alleviation of power shortages in the Southern Power Region of the country. In addition, it was to assist GOI in achieving its objective of further advancing the regional and ultimately the national integration of the power subsector. Project Description 2.04 The Project involved the first phase of the Ramagundam development and consisted of: (a) civil works comprising acquisition of land, construction of roads, culverts, railways and other miscellaneous preliminary works, power station and residential buildings, plant 31 The original program for expansion of gencrating capacity during the Sixth Five Year Plan differs slightly from the actual program as presented in Annex 2. -5- foundations,canals, ducts, cooling towers and other works associatedwith the circulatingwater system; (b) three 670 ton/hr boilers and three 200 MW steam turbo generatingunits completewith all auxiliariesand ancillary electricaland mechanicalequipmentand the switchyard; and (c) the 400 kV AC transmission system comprisingseveral single circuit lines (i) Ramagundam-Hyderabad (198 km), (ii) Hyderabad-Nagarjunsagar (127 km), (iii)Nagarjunsagar- Cuddapah (282 km), (iv) Cuddapah-Bangalore (230 km), and (v) Cuddapah-Redhills (232km) and several 400 kV substations. 2.05 The site of the Ramagundamdevelopment of 2,100 MW is in KarimnagarDistrictof Andhra Pradesh,South of Godavaricoal fields. The site selection was based on the ready availability of coolingwater, coal and transportation facilities. Coal for the power stationwas to comie from South Godavaricoal fields of the Singarani collieries,located some 15 km from the proposedpower stationsite. Coolingwater for the projectwas to be drawn from the right bank irrigation canal from the Pachampad dam located 100 kw, up-stream of the power station, and the water intake structure on the irrigationcanal was 10 km from the project area. The project was selected as a logicalslice of the overall development which on economic and engineering considerations could operate as an independent and viable project in the event that construction of the remaining units (aggregating 1,500 MW) was delayedor deferred. III. IMPLEMENTATION Credit and Loan Effectiveness 3.01 The credit and loan were made effectiveon May 4, 1979 following executionof the subsidiaryloan agreementbetweenGOI and NTPC. Project Execution 3.02 The Projectwas executedsatisfactorily, but because of an initial delay of about seven months in the placementof orders for the main plant equipmentall three generatingunits were commissioned later than originallyplanned. However,the construction time taken by all the three generatingunits was less than that envisagedin the construction schedule of 48 months, from the placementof orders, for the first unit and at an intervalof six months each thereafterfor the subsequent units, thereby considerably reducingthe extent of delays that took place in the award of contract. In retrospect, the above delays could have been anticipatedif adequateallowancehad been made in the appraisalreport implementation schedulefor the site related infrastructural constraintsand the time requiredfor either review of bid documents by consultantsas well as by -6- the Bank or completionof bids evaluationby NTPC (para 3.11). The Project also benefittedfrom the conceptof quality assuranceand of design, supply and erectiontype of packagingfor auxiliarysystemswhich was introduced for the first time in the countryby NTPC. tPara.8.03). 3.03 The Project site, which is located in a remote under-developed area of Karimnagardistrictof Andhra Pradesh,was lacking in infrastructural facilitiesas well as in basic civic amenitiessuch as drinkingwater, residential accommodation,etc. It was throughplanning and perseverancethat these constraints were overcome. 3.04 As in the case of the Singrauliand Korba projectseffortswere made at the design stage itself to increasethe safety,reliability and availability of power plants and thereby increaseperformance of the units by the introduction of the followingcontrol and instrumentation packages: (a) automaticturbine run up system, (b) coordinatedcontrol system, (c) centralized steam and water analysissystem, (d) uninterruptable power supply system, (e) analog control system, and (f) computerizedon-line data acquisitionsystem. In additionto the above systems,a micro processor base burner managementsystem and a new design and equipmentfor storing and evacuatingthe bottom ash in place of the conventional scrapper conveyer system,were used for the first time in NTPC to improveplant performance. 3.05 During the constructionand erectionstages of the project also, the following were also faced by NTPC: major constraints (i) the rocky nature of earth in the area requireda large amount of blastingto be carried out; (ii) a temporaryash pond had to be constructedto meet the commissioningschedules as a result of land acquisition problems; (iii) the water treatmentplant packagewas ordered from a went into West German firm which subsequently liquidation; and (iv) the power receivingsystem from the Andra Pradesh SEB, one of the beneficiariesof power from the Project,was delayed;as a result units were initiallysynchronized through the 33 kV system. 3.06 A well defined field plan, adequatequalitychecks during the erectionand commissioning stage, and elaboratetesting and commissioning procedures enabled the units to operate from the beginning without major problems. Several minor problemswere correctedby timely action, including minor modifications in design. -7- Environment,Resettlementand Rehabilitation 3.07 The implementation of the Project,includingthe expansionphase of 1,500 MW, requiredthe acquisition of 4,116.0hectares (10,289acres) resultingin compensation and/or resettlement of 2,279 familiesaffecting 13 villages. Part of the requiredarea, locatedat about five km from the plant, was needed for dumping the ash. That area could not be acquired in due time and thereforea smallertemporaryash pond, closer to the power station,has been used during the first two years of plant operation. The initial ash disposalarea has now been completelyfilled up and rehabilitated with afforestation. The final disposalarea is used at presentwhere ash is pumped as a slurry, througha pipeline,and water is drawn away without any detrimental effect on the local ecologicalsystem. Regardingresettlement, 782 familieshave resettledin dedicatedcolonies in the neighborhoodof their former dwellingswhere internalroads, culverts,tubewells,recreationfacilities and seven shops were also allottedto oustees in NTPC shoppingcomplex. Details on measures taken are detailed in Annex 4. AlthoughNTPC providedcivil amenitiesin the relocationcolonies,including medical facilities, periodicvisits by medicialofficersand preventivecheck up, public health is increasingly deteriorating in the colonies,partly as a result of a larger squatter settlement which has grown around the area. Also, although 250 oustees were trained and given employmentby NTPC, and approximately 400 were employedthroughvarious contractors working for the project,no employment opportunities have been providedto about two thirds of the oustees, because of their low level of skills. 3.08 As a result of this experience with the RamagundamProject,NTPC is now becomingmore aware of the particularcomplexities associatedwith resettlementissues. In recent projects- e.g. the TalcherThermal Power Project - the approachhas been from the beginningmore comprehensive. In the case of Singrauli,NTPC is undertaking an overall EnvironmentImpact Assessment(EIA), and throughan Action Plan (currently under preparation), for environmental protection, resettlement and rehabilitation, NTPC is taking action to improveas far as possiblethe local human environment. However, it has to be recognized that there are limits to NTPC's ability to resolveall the environmental issues associated with a power development project and that the local governmentauthoritiesshould be responsiblefor the public infrastructure needed in the context of a large project development. NTPC has also taken appropriate measureswith regard to stack emissionsand water effluents. They monitor regularlythese aspectsof environmentprotectionand comply so far fully with environmental quality standardsprescribedby the Indian NationalCommitteeon environmental planningand thereforeno ecological problemsare envisaged. In addition, througha continuousafforestation programmore than 200,000 trees of various specieshave been planted and this will be expandedin the future, notably in order to rehabilitate the ash pond area. The amount paid for land compensation, resettlement facilities and rehabilitation has been around Rs 144.9 millions. -8- Reporting 3.09 NTPC met all the Bank's reportingrequirement,submittingon a regularbasis, quarterlyprogressand annual reports. Project Cost 3.10 The Projectwas completedat a cost of Rs. 7,070.7millionwhich is about 61Z higher than the appraisalcost estimateof Rs. 4,395 million. A detailedcomparisonof the estimatedand actual protect cost is presented in Annex 5. The actual cost was about 76Z higher than appraisalestimates for electricaland mechanicalequipment,115? higher for preliminaryand civil works, about 30Z higher for transmission system. The coal handling and transportation systemwere however lower by 332 than the appraisal estimate. Most of these increasesare attributable to: (i) customs duty for which allowances were not made in the originalcost estimates, (ii) increasein the foreign exchangerate for the dollar which went up from Rs. 8.6 per USS at the time of appraisalto around Rs. 13 per US$ when the projectwas completed(iii)higher than anticipated increasein the price of equipmentand materials,(iv) minor changesin the scope of Project particularly in the area of civil works, (v) to cover expenses amountingto Rs. 64.4 million for trial and pre-commissioning, and (vi) miscellaneous expenditures for tools and plant instruments. Based on the amount of contractsin foreigncurrencies(aroundUS$ 130 million), the direct foreign cost of the project is now estimatedat Rs 1,352 million as comparedwith only Rs 554.6 million (USS 64.4 million)in the appraisal estimatesfor the direct and indirectforeigncosts. This substantial underestimation highlightsthe difficultyin estimatinga priori the share of foreign and local costs in industrial projectsin India where there is a strong competition between local and foreign suppliersof equipment. When consideringthe total projectcost estimatesin dollar value, however, they amount to respectively US$ 511.0 million in the appraisaland US$ 693.4 actually,resultingin a smallerincrease- 36? - as comparedwith the above increasein rupee value. Procurement 3.11 Bank guidelines were strictlyadheredto by NTPC for procurement of 57 contractsinvolvinginternational competitive bidding and representing an amount of Rs 2,780million. Among these 57 contracts listed in Annex 6, 15 were awarded to foreign firms for an amount estimated at Rs 1,600 million. The averageprocurement time per contract- from the issuanceof bid documentsto contractaward - was nearly one year, consistingof around 3.6 months for bidding and about 7 - 9 months for bid evaluation. This latter time is certainlytoo long and constitutes a major source of implementation delay. However, some progressin this regard has been made so far in subsequent projectsundertakenby NTPC (e.g. Farakka II). NTPC is in the process of finalizing with the Bank, a standard bidding documentwhich is expectedto cut down the time lag substantially. Several contracts were amendedto includeeither supply of spare parts for -9- claims were equipmentor additionalquantityof material. No significant raised by bidders. Disbursement 3.12 The appraisalestimateof disbursement and actual disbursement are presentedin Annex 7. Actual disbursement was slower than the appraisal estimatemainly because of the initialdelays in the placementof the orders for the main plant and equipment. As of December31, 1985, the originaldate for closing the credit, about 86.52 of the funds had been disbursed,the remaining13.52 representing paymentswithheld from the contractorpending the successful completionof performance and guarantee test on the main plant, equipmentand supply of spare parts. The closing date was extendedto June, 1987 and disbursements were eventuallycompleted by March, 1988. Performanceof Consultant,Contractors,and Suppliers 3.13 In additionto the review consultants,NTPC had appointed consultantsfor: (a) Detailedengineering of all mechanicalauxiliaries, part of the electricalequipment and civil works of main plant, ash handlingsystem,water treatmentplan and coolingwater system. (b) Development system and railway of coal transportation siding. (c) Detailedengineering of civil works related to balance reservoirand ash disposalsystem. The performanceof the consultants - representing around 750 man- months of activities- was satisfactory and their associationwith the RamagundamProject furtherenhanced NTPC's capability in detailed engineering and strengtheningits in-housetechnicalservicesdivision. 3.14 The performanceof contractsand suppliers was also generally satisfactory. As is to be expectedin a projectof this size, problemsdid arise during erectionand commissioning. These, however,were addressed expeditiously by the contractorsand manufacturersconcerned. PERFORMANCE IV. OPERATING 4.01 As per NTPC's procedures,a generatingunit is declared commercially operational only after it has been inspected thoroughly togetherwith the associatedequipmentand has operatedfor a minimum period of 1.000 hours continuously(withinfour months of the date of synchronization), carryinga full load for not less than 72 of these hours -10- and generatingat an energy equivalentrate of 2,500 kWh per kW per year during that period. Of the three units comprisingthe project,the first unit was able to achieve the operatingstandardwithin four months from the date of synchronization, i.e. within 96 days. However,in the case of the second and third units, it took 155 days and 138 days respectively to bring the units into commercialoperation. This was due to initial teething problems. During the first year of commercialoperation,the second and third units achieveda plant load factor 64.02 and 77.8Z respectively, which comparesfavorably with the load factor of 63? envisagedin the appraisalreport. The first howeverwas able to achieve a load factor of only 49.4Z during the same period primarilydue to teethingproblemswhich eventuallyhave been resolvedenablingthe unit to achievea plant load factor of respectively of 66.92, 86.35? and 87.25X in the followingthree years. Highlightsof the operatingperformance of the three units are presentedin Annex 8. 4.02 Although the performanceof all the three units comparesfavorably with the expectations of the appraisalreport, some of the main plant equipmentand auxiliariesrequirefurther improvement to iLchievefull stabilityand i liabilityfor base load operations. Specifically NTPC intendsto: (a) increasethe spare capacityof coal mills, (b) installan additionaloil seal near the primary air fan bearing in order to protectthe fan, Cc) take specialdesign measures for early detectionof ash build up in furnace, 'd) improvethe design of low and high pressureheaters to eliminateleakages,and plugs in the motors of cooling (e) provide anti-condensation towers. 4.03 Fuel for the projectwas to be suppliedfrom the South Godavari Coal Fields of the SingraniCollieriesLtd. As NTPC has no control over its development, assurances had been obtainedfrom the coal company that it will take all necessarysteps to make availableadequatecoal supplies for the efficientoperationof the three 200 MM units. The companyhas compliedwith its commitments, despite initial delays in the implementation of the coal loading facilities at the mine. The effect of this delay on generationwas minimal as alternative arrangementswere made to meet the initialrequirements of coal. The qualityof coal suppliedto the power plant was only marginallybetter than envisaged,but the price paid for it by NTPC was substantially higher than originallyestimated. The Corporation was allowed to pass on these higher fuel costs to beneficiary SEBs throughhigher tariffs. (Para.5.02). -11- V. FINANCIAL PERFORMANCE 5.01 As per the agreement,NTPC was to sell power from the project to SEBs in the SouthernRegion4/under bulk supply contractssatisfactory to the Bank and GOI was to ensure that all necessarystepswere taken to obtain an undertaking from respectiveState Governmentsto purchase,in the aggregate,not less than 85Z5/ of output of power from the Project. GOI and NTPC have compliedwith their commitmentdespitean initial delay in the ratification of the bulk supply contractsprecipitated, in part, by the absence of a blueprint for establishing multi-partycontractsfor the exchangeof power. NTPC's operatingand financial performance, however, was not adverselyaffectedby this delay. 5.02 NTPC's actual and projectedfinancialstatementsfor the period FY83-FY88are presentedin Annexes 9 to 11. The most salient featureof NTPC's operationsduring the period FY84-FY88is the spectacular growth the corporation experienced. While net fixed assets in operationtripled, sales of electricity increasedalmost five-fold. Even more strikingis the high level of investmentin projectsunder construction.Work-in-progress at the end of the period was almost twice as large as that of assets in operation. This reflectsthe continuation of a highly accelerated expansion program which, in turn, explainswhy the self-financing ratio remained modest during the period, representing only 5.82 of the total financing requirements, despite the reasonable rates of return achieved (around 162 in the last three years, well in excess of those projected in the appraisalreport,and much higher than the 9.5X requiredunder the loan as a target for FY89). Debt servicecoveragewas very comfortable during the period because repaymentof debt startedonly in FY89. Current ratio, which was below one during the earlierpart of the period improvedto 1.6 by FY86. However,a closer look at the working capitalpositionof NTPC reveals,startingin FY83, a very unsatisfactory collectionperformance. Under recent loans, a covenantwas introducedthat requiresthat NTPC's receivablesshould not exceed the equivalentof two months of sales. Although,NTPC made strenuousefforts to reduce the level of receivables over the past few years, from 7.5 months in 1982-83 to 3.3 months in 1988-89,NTPC has not compliedwith it and the Bank has requestedand agreed during the negotiations of the proposedRegionalPower Systems Project (PY90) the implementation of an Action Plan that is expected to correct the situation. Sales in the last three years were lower than those projectedin the staff appraisalreport because of delays in completing projects,often as a result of slow initialprocurement. In addition,the time requiredto bring units into commercialoperation,after their installation, was not taken into consideration in the appraisalreport. 4/ Power from the projectwas to be sold in bulk to the State Electricity Boards of Andhra Pradesh,Karnataka,Tamil Nadu, Kerala and the Electricity Departmentof Goa. 5/ The remaining15Z was to be sold in accordancewith prioritiesto be determinedby GOI. -12- The followingtable presentsthe key operationalresultsforecast in the appraisalreport comparedwith the actuals: FY85 FY86 FY87 FY88 Fore- Fore- Fore- Fore- cast Actual cast Actual cast Actual cast Actual Sale of Energy (GWh) 8,741 8,316 15,750 12,839 23,647 14,408 29,692 17,533 Average Revenue (P/kWh) 29 39 29 40 29 44 29 48 Operating Revenue (Rs. Million) 2,495 3,438 4,536 5,294 6,878 6,453 8,732 8,622 OperatingExpenses (Rs. Million) 1,768 2,042 2,951 2,943 4,289 3,522 5,191 4,712 OperatingIncome (beforeinterest) (Rs. Million) 727 1,396 1,585 2,350 2,589 2,931 3,541 3,910 Net Income (Rs. Million) (218) 904 4 1,781 706 2,065 1,520 2,662 Rate of Return 5X) il 3.1 12.7 4.6 16.8 6.3 17.0 8.1 16.4 OperatingRatio (2) 71 59 65 56 62 55 59 55 Debt as Z of Debt & Equity 49 32 47 36 45 42 41 43 Debt Service Coverage 1.1 3.3 1.1 4.9 1.3 4.0 1.4 3.9 l1 On averagehistoricalfixed assets in operation. 5.03 The AppraisalReport'sf'.nancial forecastsanticipatedthat NTPC would eventuallyachieve and maintain from FY89 onwards (the first year in which the 2,100 MW Singraulipower stationwas expectedto be in full commercialoperation)a rate of return of not less than 9-1/2Z on the originalcost of its averagenet fixed assets in service. As shown above, actual rates of return were considerably higher than forecast. This was partly because of the introduction of higher than forecasttariffs (see table below), and partly due to higher than expectedplant load factor achievedat NTPC stationsthan the targets set in the appraisalreport. NTPC's averageplant load factor increasedfrom 58? in FY85 to about 74? in FY86, to 79.6Z in FY87 and 75.6? in FY88 at the Ramagundam,Korba, Farakka and Singraulipower stations. The early stabilization of the Ramagundam 200 MW units, increasedavailability of the Singrauli units (both 200 and 500 MW) and a sustained high level of performance of Korba units (both 200 and 500 MW), were the main reasons for this performance. -13- Forecastand Actual Revenueper kWh sold (Paiseper kWh) Financial Percentageincrease Year Forecast Actual over forecast (Z) FY83 28 35 25 FY84 28 36 29 FY85 29 39 34 FY86 29 40 38 FY87 29 44 52 FY88 29 48 66 5.04 During the FY83-PY88period, NTPC financedabout half of its rapid growth by borrowing. GOI funded about 602 of NTPC's totai.requirements, three quartersof it through equity contributions and the balance as loans includingassistancefrom the World Bank. Through GOI, the Bank financed Rs 14.6 billion on about 22X of NTPC's requirements. GOI's loans have a total maturity of 20 years, including5 years of grace and an i'terest whichhas changed over time and currentlyis 152 p.a. It is interesting to note that NTPC floatedbonds in the domesticmarket in three public issues and three private placements,for a total of about Rs 16.8 billion (US$1,122 million at current exchangerate). In addition,NTPC has raised funds in Japan through a syndicateof banks and financialinstitutions. Finally,NTPC has receivedfinancingfrom the OPEC Fund, the Saudi Fund, KfW, the Governmentsof the United Kingdom,USSR, Sweden, Norway, Italy, and most recently,untied funds from Japan. 5.05 NTPC was requestedto furnishto IDA and the Bank, not later than seven months after the end of each fiscal year, certifiedcopies of its financialstatementsand a copy of the auditor'sreports. NTPC has compliedwith this requirement. VI. INSTITUTIONAL DEVELOPMENT 6.01 As noted, the credit and loan were the Bank Group's third lending operationwith NTPC which itselfhad been establishedless than four years prior to that operation. The institutional objectivesof the credit and loan thereforewere to providethe impetusand assistanceneeded to ensure that the development at Singrauli, Korba, Ramagundamand Farakka,assigned to NTPC, were implemented successfully. This objective was achievedfully and in fact NTPC has been able to assume a much larger role in the power sub-sectorthan was envisagedoriginally. This is made evident by the expansionof its existingfacilities, organization and management,and staffing. As of end August, 1988, NTPC was operating16 new 200/210MW units (fiveat Singrauli,three at Korba, three at Ramagundam,three at Farakka and two at Vindhyachal) and six new 500 MW units (two at Singrauli, _14- two at Korba and one each at Ramagundamand Rihand) totalingaround 6,220 MW, and 6,600 km of 400 kV transmissionlines. NTPC also operatesthe 720 MW BadarpurThermalPower Stationnear Delhi and is responsible for the constructi'onand operationof a 270 MW captive Thermal Power Station establishedat Korba for the Bharat AluminumCompany,on a managementfee basis. 6.02 In responseto the rapid increasein its operationaland constructionactivities, NTPC also adopteda regionalorganizational structurein August, 1982 on the basis of a study conducted with assistance from power utilitiesand consultants in the UK and the USA. Each region is under the charge of an ExecutiveDirector,who is responsible for the constructionand operationof generationand transmission facilities. The CorporateHeadquartersis progressively concentrating on policy making and on providingfunctionalguidanceto the regionsand operatingdivisions. AlthoughNTPC has centralized engineering and contractadministration, in order to utilize the trainedmanpowermore effectively, the conceptsof carryingout these two functions on a projectbasis will continue. 6.03 As of August 31, 1988 NTPC had about 19,594 employees. Training of engineersand operatorsfor operationand maintenance was to be an integralpart of NTPC's human resourcesdevelopment program. Accordingly, the corporation developedtrainingprogramsand established an in-house managementtraininginstitute. So far 12 batches of engineershave been trained. For operators'training,NTPC had set up one 200 MWfull scope training simulator and has recently procured a similar 500 MWwhich should be commissioned in 1992. In addition two training groups, namely Central TrainingInstitute ,CTI) and Power ManagementInstitute (PMI),have been established to provide technicaland managementeducationrespectively. It has been decided to convertthese traininggroups into full-fledged independentinstitutes with the objectiveof increasingthe number of personnelthat CTI and PMI trains, therebyexpandingits role in order to help satisfy the power subsector's needs. The CTI and PMI will be equipped with all facilitiesof a well developedcampus,which is being constructed at Noila, near Delhi, where an independent researchand development centre will also be installedto conductin-houseresearchin the areas of operationand maintenance. 6.04 As NTPC stationsare located at pitheadsin remote areas which are difficultto access from CorporateHeadquartersin New Delhi, NTPC has decidedto establishan integrated modern communicationsystem using computersand a satellitecommunication system. This system is expectedto be completedshortly. VII. ECONOMICREVALUATION 7.01 In the Appra.-alReport, the return on investmentwas calculated for the entire 2,100 MW development at Ramagundamto demonstratethe relationship between tariffs and the economiccost of development. It was * ~~~~~~~~~-15- defined as the discountrate at which the presentworth of the economic costs associated with the developmentequals the presentworth of economic benefitsover the life cycle of the development. The measurablecosts included: (a) Capital and labor costs involvedin the developmentof generationand transmission facilities; (b) Annual operatingand maintenancecosts; (c) Fuel costs. The benefitswere measured in terms of the revenuesto be derived from the sale of electricity. 7.02 Based on measurableeconomiccost and benefitsassociatedwith the 2,100 MV Ramagundamdevelopment, the ex-ante InternalEconomicRate of Return (IERR)is estimatedat about 10?. Because actual tariffswere higher than envisagedand more than compensatefor a higher project cost and longer construction period, the same approachresults in an estimated ex-post IERR of 12.5Z (Annex 12) which comparesfavorablywith the opportunitycost of capital,implyingthat NTPC's bulk supply tariffs for the southernregion continueto adequatelyreflectthe economiccost of supply. VIII. OF THE BENEFICIARY PERFORMANCE ANDTHE BANKGROUP 8.01 The performance of NTPC, the beneficiary of the credit and loan, was generally commendable and met most of the expectations of the appraisal report. The performance has also to be consideredin parallelwith the performance of the two other projects - the Singrauli and Korba Thermal Power Project - implemented nearly simultaneously and completed successfully. NTPC implemented also this Project satisfactorily and in almost identical time as originally envisaged. However, the procurement stage took too long, in particular the award of major contracts which directly affected the overall implementation schedule. In fact, the extensive time needed to complete the procurement stage, in particular bid evaluation, has been and remains a basic weakness in NTPC's operational performance. Also bidding documents, which have been completed with successive amendments, tend to become confused and cumbersome for the bidders. In order to remedy that situation and discuss basic procurement practices, the Bank recently organized a procurement seminar, attended by NTPC and SEBs' staff, which has been much appreciated by NTPC management. Following above procurement delays, NTPCwas able to reduce the construction time for each of these units by a period of around two months. In addition, when considering the three projects together, NTPC initiated improvements on its own accord which are having, and should continue to have, beneficial spin-offs. The most notable of these, including some that were introduced in the country for the first time, are described below. 8.02 NTPC implemented in its projects a control and instrumentation package, the first of its kind in the country, to improve the performance of power plants in terms of safety, availability and reliability. The -16- package consistsof systemsfor automaticturbine run-up coordinated master control,centralized steam and water analysis,micro processorbased analog control and computerizedon-line data acquisitionsystem (DAS). The analog control systemwith its self-surveillance and diagnosticfeatures,was implemented to optimizeplant performance. LikewiseDAS will assist plant operatorsin preparingperformance calculations, pre and post trip logs and operatorguidancemessages. 8.03 Followingthe experiencegained illimplementing the Singrauliand Korba ThermalPower Projects,NTPC has prepareddetailed specifications for power plant equipmentprocuredthrough International CompetitiveBidding (ICB). A contractmanagementsystem has been developedand implemented for this purpose. The conceptof qualityassuranceand of design, supply and erectiontype of packagingfor auxiliaries were furtherdeveloped. Under this packagingconcept,contractors and vendors are responsible for detailedengineering of the system,manufactureor fabrication, testing and supply of equipmentas well as erectionand commissioning of the sy,-temas a whole. This approachhas enabledNTPC to reduce the staff time sp4t on coordinating activities without sacrificing high standardson quality control and system performance which are ensured throughcontractual obligations of the supplier. 8.04 For the operationof the power stationslocatedclose to pitheads NTPC has adopteda system of rapid loading of coal at coal mines for dedicatedunit trainswith bottom discharge wagons and undergroundcoal receivinghopper. Other utilitiesin the countryare currently contemplating the adoptionof this system. 8.05 For the trainingof plant operatorsand technicians NTPC has installed,at Korba, a full scope replicadigitalcomputerbased 200 MW coal fired thermalpower plant trainingsimulator. A 500 MW simulatorof similar type was recentlyprocuredand is being installedalso at Korba.61 These trainingsimulatorssimulatethe entire boiler turbine generatorand their auxiliaryfunctionsin digital computersthat exactly correspond with the real plant operation. These simulators, introducedfor the first time in India, will be used for the trainingof NTPC staff as well as those of the SEBs. 8.06 Other facilities which NTPC has initiatedto improve the overall efficiencyand functioning of its power plants and transmission system include inter alia a satellitecommunication system,spring supported equipmentfoundations, variablefrequencydrive and static reactive compensators. As a result of the successin implementing its first projects,NTPC has been encouragedto furtherdevelop its capabilityin undertakingconventional coal thermalpower projects. Furthermore, with the CombinedCycle Power Project (Ln. 2674-IN)and Central and Rihand TransmissionPower Projects,(respectively Ln. 2283-IN and Ln. 2555-IN), 6/ The TATA ElectricCompaniesalready operate a 500 MW gaslfuelthermal power plant trainingsimulatorat Trombay,financedunder the Third Trombay Power Project (Ln. 1549-IN). -17- NTPC has introducedin the country new technologyin under !.mplementation, power generationand transmission(highvoltage direct current (HVDC)). 8.07 In additionNTPC has made substantialprogressin developingand implementingsystemsfor financialmanagement, personnelmanagement, selection,recruitmentand training;stores accountingand spare parts management;maintenancemanagementand engineering. 8.08 The financialperformance of NTPC during project implementation and initialyears of operationwere also satisfactory. In particular,NTPC has been able to expand and diversifyits sourcesof projectsfinancing. However,NTPC has been unable to maintain its account receivables from its clients,the SEBs, at a level of two months of sales covenantedin subsequent operationsfor NTPC projects. In this regard, the arrears situationof the SouthernRegion SEBs, suppliedby the Ramagundampower station,is slightlybetter than in other Regions. The overall situation is neverthelessbecom!.ng critical;over the past severalmonths (late 1988), total receivables have remainedstable at slightlyless than four months,whereas, in accordance with legal covenantsagreed under following loans, they should not have exceededtwo months of sales. 8.09 With regard to environmental protectionand resettlement needed for construction of the plant, NTPC performanceat Ramagundamwas satisfactory. Howevermore recently,NTPC has been facing a growing problem in regard to maintainingecologicalbalance,in view of the rapid expansionin industrialactivityin the country. NTPC intendsto establish an environmental impact assessmentcell to conduct comprehensive studies which would cover all ecologicalaspects associated with the settingup of power projects. This cell would also monitor on a continuousbasis, pollutantsfrom the power stationsto ensure that these are within the acceptable norms. NTPC, with the assistanceof the Bank Group, has initiated work on a Environment Impact Assessment(EIA) in the area around Rihand Lake, SingrauliCoalfieldsand severalpower stationsfor which expatriateconsultants, have been recruitedto assist NTPC. 8.10 The Bank Group supervisedthe project closelyand maintainedgood relations with the beneficiary allowingit the latitudeneeded to innovate. This fosteredan environment conduciveto increasedBank Group involvement with NTPC. To date, the Bank Group has assistedNTPC in implementing a total of 13 projects. However,Bank action could have been prompter in dealingwith procurement delays and the size of the receivables,although severalattemptsto remedy these issues have been made which have been so far not as successfulas expected. Throughthese operationsthe Bank has been strengthening the institutional capabilityand financialviabilityof the corporation. The Bank has also continuedaddressinga number of shortcomings of broader sectoralconcern in initiatingstudiesaimed at formulation of a long term power transmission plan, re-structuringbulk supply tariffs,and most recently,conductingan EIA study in the Singrauli region. 4 ~~~~~~~~~-18- IX CONCLUSION 9.01 The Projectwas successfulin that the three 200 MW units were completedsatisfactorily and are generatingthe much needed electricityfor the SouthernRegion of the country. In addition,the project and subsequent Bank Group lendinghave providedthe impetusand assistance needed by NTPC to assume a larger role than envisaged. NTPC needs to be commendednot only for its active participation in all stages of project preparation,implementation and its final operationbut also for its initiatives not only in continuingto implementefficiently large conventional coal fired thermalpower stationsbut also in other areas such as the introduction of gas based combinedcycle power generation, HVDC transmission, new control and instrumentation package,contractmanagement system,rapid coal loading system, simulatorfor operational training, supply and erectiontype of packagingfor auxiliaries of conceptsof quality assurancein engineering design etc. On the financialside, NTPC has been successfulin increasingsubstantially and in diversifying resourcemobilizationfor future projectsfinancing. These should continue to have beneficialspin-offsfor both NTPC as well as India's SEBs and the developmentof the sector in general. In this regard,lending operations to NTPC has proven to be more successful and beneficialto the sector than previousoperations with central institution such as the respective Transmission and Rural Electrification Projects. ANNEX 1 -19- Page 1 of 2 INDIA CREDIT 1648-INAND LQAN 874-IN RAMAGUNDAMTHERMALPOWERPROJECT REPORT PROJECT COMPLETION Descriptionof Facilitiesin Operations As of March 31, 1978, India'stotal installedgeneratingcapacity was 23,669 MW excludingabout 2,506 MW of non-utilitycapacity,mostly thermal,which was owned by major industrial consumersto meet their own needs. The generatingcapacityis shown below: InstalledGeneratingCapacityas of March 31, 1978 (MW) Conventional Region Thermal Nuclear Hydro Total Northern 3,143 220 3,233 6,596 Western 4,074 420 1,690 6,184 Southern 1,983 - 4,118 6,101 Eastern 3,614 - 893 4,507 North Eastern 188 - 86 274 Andaman,Nicobar & Lakshadweep 7 - - 7 Non-utility 2,506 - 2,506 15,515 640 10,020 26,175 Intrastateand interstatetransmission was at 132 kV and 220 kV and generally,major load centreswere interconnected by i32 kV and 33 kV sub- transmissionlines. Distribution voltageswere 11 kV and 4151240V. The supply in generalwas reliable, except for the power shortageduring sunmmer,but losses both technicaland non-technical were estimatedto be about 201 of the energy sent out. ANNEX 1 -20- Page 2 of 2 Supply and Consumption of Electricity 1969170 1975/76 1976/77 Installed capacity (excl. non-utility plant)(HW) 14,102 20,117 21,468 Electricity Generated (GWh) 51,988 79,231 88,333 Electricity Sold (GMh) 41,061 60,246 66,608 Electricity Generation per capita (kWh) 96.2 132.5 147.2 Electricity consumption per capita (kWh) 76.0 100.3 111.0 Average Annual Loadl/ I Factor (Z) 49.7 52.2 54.2 Portion of Sales (Z) Agriculture & Irrigation 9.2 14.5 14.4 Railway Traction 3.5 3.1 3.3 Industry 69.1 62.4 62.5 Commercial & Government 6.5 7.3 7.3 Public Lighting 1.0 1.0 0.9 Domestic 8.6 9.7 9.5 Public water works, drainage etc. 2.1 2.2 2.1 Average Annual Growth of Sales (Z) 9.9 14.5 10.5 Losses as 2 of units sent out 16.8 19.4 19.7 1/ Annual Load Factor Electricity generated (GWh) x 1,000 Installed Capacity (HW) x 8,760 (h) x 100 INMA CREDI 874-INAID LOAN 1648-IN -_____________________________ R#UMA DLE PONJ PROJCT ________________________________ Original Programfor the EIpansLon of GeneratingCapclty durlng Slxth Plan Period 1979180-1983184 --------------------- _--------------------------------__-_------ 1979180 1080/81 1981182 1982183 1983184 Total ResglonType go. of Agzegate No. of AJ"preate go. of Aggregate go. of Aggregate of Plant No. of Aggregate No. of Aggregate Units Capacity UnLts Capacity Unlts Capaclty UnltsCaPaclty Units Capacpr Units Capaclty (MM) (1W) (1W) (NW) (EN) (MW) Northern ______________ Thermal 4 570 2 220 2 310 4 835* 3 600 15 2,535 Hydro 9 S18 2 49 2 23 10 401 7 302 30 1,293 Western ______________ Thermal 4 720 4 800 7 1,400 5 1,300 Hydra 4 1,400 24 5,620 4 180 5 212 6 142 -- -- -- -- 15 534 southern Thermal 2 510 3 600 2 600 2 400 2 435- 11 2,435 Hydra 3 145 10 692 13 1,180 13 764 9 259 48 3,060 Eastern ______________ Thermal 3 510 4 710 2 600 2 400 3 600 14 2,820 Hylro 2 2 -- -- 4 75 10 575 6 75 22 1,142 North Eastern ______________ Thermal 1 60 1 60 -- -- -- -- -- -- 2 130 Bydro -- -- -- -- 2 75 2 75 -- -- 4 1S0 Total Thermal 14 2,560 14 2,390 13 2,910 13 2,935 10 3,035 64 13,535 Bydro 18 645 17 953 27 1,495 35 1,495 22 1,251 119 6,179 -- _------------------------------ * Includes a 235 MW nuclear generating unlt Source: Central Electicity Authorlty N) -22- AM Page 1 of 2 CREDIT 874-IN AND LOAN 1648-IN RAHAGUNDAMTHERMAL POWER PROJECT REPORT PROJECTCOMPLETION Describtionof the RamagundamDevelonment 1. The RAmAgundamdevelopmentis the third of a series of large thermal power stations,plannedby the Governmentof India to feed into a 400 kV interconnectedtransmissionsystem and supply bulk power to the SEBs. 2. Ramagundam's2,100 MW power station is located in the Karimnagar districtof Andhra Pradesh,south of the Godavaririver and in the vicinity of the south Godavaricoal fields. 3. The plant consistsof three 200 MW, in a first stage, and three 500 NW, in a second stage, generatingunits with boiler plant, steam turbo generator,auxiliarymechanicaland electricalequipmentand associated transmissionsystem. The first stage of the development, comprisingthe project, consistedof three 200 MW units. 4. The first stage boilers are of natural circulation, single reheat, radiant furnace,dry bottom, single drum, balanceddraft, pulverizedcoal fired, front wall fired type. Each boiler has continuousevaporation rating of 670 tonnes/hrwith a superheatsteam outlet pressureof 157 kg/cm 2 and temperature of 5400C. The 200 1W steam turbines are two cylinders (high and intermediate pressure in a single cylinder) tandem compound, single reheat condensing type operating at a steam pressure of 150 kg/cm 2 and temperature of 537.50C. The alternators are hydrogen cooler type rated at 235 MVA and 18 kV. 5. The second stage boilers under installation are of controlled circulation, single reheat, radiant furnace,dry bottom, single drum, balanced draft, pulverizedcoal fired, corner fired type. Each boiler has a continuousevaporation rating of 1,725 tones/hrwith a superheatsteam outlet pressure of 180 kg/cm 2 and temperature of 5400C. The 500 KW steam turbines are three cylinders, tendem compound,single reheat, condensing type operatingat a steam pressureof 170 kg/cm 2 and temperature of 5370C. The alternatorsare of hydrogenand water cooled type rated at 588 MVA and 21 kV. AWM8 3 -23- Page 2 of 2 6. The salient featuresof the developmentare shown below: wer Station Capacity : 2,100 MW (three 200 MW + three 500 MW) Fuel : Coal from South GodavariCoal Field of Singrani Coal Company Average calorificvalue : 4,300 Kcals/Kg Ash content : 35% Moisturecontent : 12% Transport of Coal : Continuous unit train system with bottom ditcharging wagons. Ash Disposal : Ash is dumped as a slurry, through a pipeline, to an ash dump are located some 5 km from the power station. Land : A total of 4,165.6 hectares was acquired. XanLSuasLn : 400 kV AC L_nes = Ramagundam-Hyderabad (singlecircuit), 198 circuitkm - Hyderbad-Nagarjunasagar (singlecircuit), 127 circuit km - Nagarjunasagar-Cuddapah I (singlecircuit), 282 circuit km - Cuddapah-Bangalore (singlecircuit), 230 circuit km - Cuddapah-Redhills (Madras)(singlecircuit), 232 circuit km _ Ramagundam-Nagarjunasager (double circuit), 514 circuitkm* - Nagarjunasagar-Cuddapah II (singlecircuit), 282 circuitkm* - Bangalore-Salem (singlecircuit), 175 circuit km* - Nagarjunasagar-Munirabad (singlecircuit), 400 circuit km* * For expansion phase of three 500 MW -24- ANNEX 4 Page 1 of 2 INDIA CREDIT 1648-INAND LOAN 874-IN RAMAGUNDAMTHERMAL POWER PROJECT REPORT PROJECTCOMPLETION Land Acquisition, Environmentand Rehabilitation Resettlement, Land Acquisition 1. The origin and use of land acquired can be sumarized as follows: Land Acquired Hectares GovernmentLand 1,976.0 PrivateLand 2,140.0 Total 4,116.0 Land Use Main Plant 484.2 Colonies 372.2 Ponds 746.7 Water Reservoirand Canal 1,927.8 Railway 257.6 Roads, Pipeline,etc. 20.1 Various uses 307.4 4,116.0 Resettlement 2. The number of villagesaffectedby land acquisition was 13 requiringcompensation andlor resettlementof 2,279 families. NTPC providedemploymentto 249 oustees,around 400 were recruitedby contractors involvedin projectconstruction and seven shops were alloted to oustees in NTPC shoppingcomplex. The situationcan be summarizedas follows: People Employed Type of Property FamiliesAffected by NTPC House lost 660 42 House and land lost 415 20 Land of less than one acre 844 78 Land between one to five acres 332 84 Land of more than five acres 28 26 Total 2,279 250 -25- ANNEX 4 Page 2 of 2 3. Amongst the familiesdisplaced,782 familieshave been resettled in four coloniesincludinga total of 670 plots. Several facilitieshave been constructedin and around these coloniesincluding23 wells, electricity, roads, shops, three schoolsand recreationareas. Amongst the ousteesemployedby NTPC, 219 are working as either attendantsor junior technicians, 27 as middle technicalassistantsand 3 at middle management level. and Afforestation Rehabilitation 4. The temporaryash pond alreadycompletelyfilled has been rehabilitated with around 22,000 trees of differentspecieswhich are growing successfully. This expenditure will serve as a basis for the future rehabilitation of the long term ash pond. In addition,more than 200,000 trees have been planted in the various colonies,along the roads and in other various areas. This program of plantationwill be expandedin the future. Associatedcost 5. The costs associatedwith the various expenditures make for land acquisition, resettlement,environment protectionand rehabilitationare as follows: Items Cost (Rs) Compensationfor land acquisition 138,000,000 Expendituresrelatedwith resettlement 5,870,000 Rehabilitation 1,060,000 Total 144,930,000 -26- ANNE 5 INDIA Pe8 1 of 2 CREDIT 874-INAND LOAN1648-ZN TERMAL POIERPROJECT RAMAIUNDAM PROJECT COMPLETION REPORT Table 1 - Etimated and Actual Project Cost by Component Actual at Percnt Estimated Actual of Estimated ) <-(Re 11illion)-)i Preliminary and Civil Works 701.1 1611.4 215.8 Electrical and Mbchanical 1981.3 8411.7 176.7 Coal Handling and Transpo.rtion 321.8 214.9 86.8 Trnanmission 1192.4 1547.0 129.7 Engineering andAdministration 248.4 321.8 129.4 Miamlolneous Tool* and Plants - 52.6 Trial *nd Pro-coinsioning - 11.8 Total 4895.0 7070.7 160.9 of which ForeignCost 554.6 /1 1351.9 Local Cot 840.4 /2 5718.8 /1 Direct foreign cost bsed on contract aount In foreign currencies. /2 Including Re 80.5 mil l on In duties. ANE 5 -27- Pa9 2 of 2 VNDIA CREDIT 74-IN AND LOAN1646-1N RAAGNA THERMAL POIERPROJECT COMPLETION PROJECT REP Tabl- 2 - Actual Project Cot by Annual Exponditurs Exchang. Fscal Year 1/ PowerStation Transalesion Total Rat 2/ TotaI (Ra/US0 (US$Million) 1977/78 0.1 - 0.1 0.6 0.0 1978/79 50.0 - 60.0 0.0 5.0 1979/80 860.5 1.2 801.7 8.2 44.1 1980/81 846.2 19.8 805.5 6.1 45.1 1001/62 908.6 282.0 1141.8 9.0 120.8 19t2/88 1074.9 164.6 1089.5 0.0 187.7 1968/64 029.0 177.1 1006.7 10.8 97.7 1964/05 081.0 260.9 899.9 11.7 76.9 100/6 114.2 479.6 598.7 12.2 46.7 1966,67 202.4 96.0 299.0 12.6 28.4 1957/96 57.7 88.4 91.1 18.0 7.0 9 1960/ 848.6 78.6 422.2 14.0 80.2 Total 5528.7 1547.0 7070.7 600.4 Appraisal Estimate 8202.6 1192.4 4895.0 511.0 X voriation 72.5 29.7 60.9 85.7 /1 Borrower *isoa year: April-March /2 Averagerate during the year INDIA CRDfT 874-IN AND LOAN 1648- ______________________________ RASUNDAN TRMAL POUR P0.T _ ______,_________________________ PIIJCS 00HPLLSION 23101 Procureent Review ProcurementSchedule (DlI)t0TY) Contrector Coutract Value (in millions) Original Final Package nvitation Bd Contract Prouemt ------------------ ------------------ lRae to Bid Opening Award Si (3) Name Country Poraisa Loca (Rn) Povism Local (Rs) Scope VarIation loller a Turbo-gaaerator -Sapply 23.12.78 02.05.79 26.02.80 14 Asaldo Italy WS 97.5 2 337 US$ 97.5 2.337 -Nr.ctian 23.12.78 02.05.79 26.02.80 14 Awnaldo Italy USS 3.6 238.553 US$ 3.6 238.553 -Spares 23.12.78 02.05.79 21.08.80 14 Asaldo Italy US$ 8.2 --- VS$ 8.2 --- Three Lote -Spares 12.06.87 Ansaldo Italy US0 2.6 --- U6S 2.6 --- Additional spores ;enerator tranformar 23.12.78 02.05.79 30.11.79 11 Compton Greaes India --- 24.530 --- 26.347 Spares 6.6 kV Svltcbg8er 09.04.80 15.07.80 03.02.81 10 As" (India) India --- 42.623 --- 41.150( Deletion of 3 CTs 39kV Switcgeoar 09.04.80 25.07.80 31.03.81 11 Analdo Italy US$ 1.0 0.571 VS$ 1.1 0.571 Naitonsae spaes LT Svitobear 01.09.80 01.12.80 19.12.81 15 NMh Indi --- 43.983 --- 51.161 Chnges La swltchgear od Control & Relay Pael 06.08.80 17.11.80 15.06.81 10 Englsh loec. India --- 14.244 --- 22.772 Additional equaDont Unit Station VSrformer 19.10.79 07.01.80 13.06.80 9 Eas,En g. India --- 13.9W3 .- 14.115 Spares LT Indoor Transformer 15.09.80 10.11.80 13.08.81 i1 Volta. India --- 2.974 --- 2.974 33kV 2. Cables & Acc. 25.08.80 04.11.80 01.05.81 9 I taube" Japn nY 334.3 --- JY 334.3 --- o.6kV Power Cables 25.08.80 04.11.80 29.06.81 10 Vnlversal Cables India --- 19.337 --- 17.120 DeletLon of 9ka Water Sreatmnt Plant 20.04.79 18.07.79 24,02.81 10 or4pler India --- 29.028 --- 29.368 Cbimey Elevator --- --- 16.06.81 Linde Ali-mrk weaden 1krr 0.6 --- SUkr 0.6 --- 1100 Power & Control Cable 07.10.80 12.12.60 12.08.81 10 Finoles Cables India --- 29.315 --- 32.000 Addttion of 119 ba Data AcquIsltton Systm 20.02.80 17.06.80 18.0S.82 25 8CIL Iia --- 22.640 ._ 26.966 Additional carvd Control & Instrumentation 20.02.80 17.06.80 16.07.81 17 SiaMo_ India --- 66.944 --- 83.399 A&dtional control Cooling Water Plant 16.02.79 30.05.79 18.01.80 11 Plore Id ___ 13.029 --- 10.149 Deletion of two pua Air Compressot 15.03.80 26.06.80 23.08.81 17 sat. ag". Idia --- 11.640 -__ 11.640 Coal snling Plant 07.03.79 13.06.79 26.03.80 12 Uecon SgM. India --- 151.663 --- 152.124 Ash Bandlng Plant 15.11.80 29.02.81 04.08.81 10 Indue Pvt. Ltd. India --- 46.061 --- 50.510 AddItlonal beads pipes Waos 12.08.80 10.11.80 05.08.81 12 Ci Itda --- 18.646 --- 18.646 Additional Wagonp --- --- 22.01.86 Cinao India --- 17.441 --- 17.441 Locmotivee 12.08.80 13.11.80 12.10.81 14 Pec Intt --- 43.670 -.- 43.990 Fuel OiL aNodling Plant 02.09.80 26.11.80 12.08.81 11 TSobeo-aloct. Sog. adLe --- 14.680 --- 14.320 Sydra1lc Rerailing --- --- 03.02.82 BCtel Rothe Er"d, Oe mry 08 0.3 1- D 0.1 --- Hydroe Oxygen Plant 25.10.80 14.01.81 27.07.81 9 Ereba 4 Cie --- 6.659 --- 6.633 Consutacy 08.10.79 YI UK L 0.1 --- , 0.1 --- Bu Post lamulator 21.07.81 RosenthalVechxlk Geany D3 0.5 --- am 0.3 --- 400kV Switbet4r -PackageA 15.12.79 23.04.80 21.11.80 10 AUS Selafuke Cy Ge DM S.0 --- DM S.8 --- nccreas frc 16 to 21 break -Pacage a 15.12.79 23.04.80 20.11.80 10 Nivele TAustrit IadLe --- 14.860 --- 17.6 St additionalisolator -Package C 15.12.79 23.04.80 25.02.81 14 W.S. Isulators India --- 14.090 --- 16.5 Increa d quantity -Package D 15.12.79 23.04.80 21.11.80 11 A41 Velefunken ON eCormny 1.8 --- 36 2.5 --- Inereasd fra 9 to 14 break -PackageB 15.12.79 23.04.80 20.11.80 11 Hivelum Tadustrtes Iadie --- 9.260 --- 12.000 Addtinal lsolatore. -PackageP 15.12.79 23.04.80 25.02.81 13 W4.. Inulators Inda --- 8.520 --- 10.120 Addtional quantity. Increaed by 151 Length Increased(201) S double circait inta of81 single ZUIAD CMUI? 074-ZR AN ZOON 1648-IN ----- - -- - --- -- R1CM 2WL PWER P ________________________________ Procurement Rein., Proouremt Sabedule (DDOlIIY) Contractor Coatract Value (in miUion) Orignai Yical P _akae lnvtation Bid Contract Procement ------------------ ----------------- e to Bid Openia AM" tIns (N0) Sam COnR7 PoroLan Loal (Rs) Person Laoc" (Rs) Scope Vaition tower -Rseunda - 8ydatabad 16.07.79 18.10.79 20.03.80 5 Best & Crnto tAiL --_ 28.81 __ 3.736 -Dyderabed - NKSr 21.12.79 26.03.80 08.10.80 11 8a Indisa Ltd. ndia --- 18.492 --- 41.400 -U.sgar-Ca 5apab-I 21.12.79 26.03.80 --- --- t_mni E,4s. lad" --- 41.135 --- 68.087 ACSRNoose Conductor 15.01.80 03.05.80 15.12.80 11 tndasa Spain US$ 8.7 --- tS$ 8.7 --- ACSR Noos Conductor 15.01.80 03.05.80 13.12.80 11 Alud I --- 30.400 --- 30.400 CSER oos. Conductor 15.01.80 03.05.80 15.12.80 11 Indian AIm. Cables India --- 30.303 --- 30.303 ACS Moose Conductor 15.08.82 10.11.82 29.06.83 10 Alund India --- 38.250 --- 41.S60 Addlttoinl qusnttty uspension * Tenson 02.01.80 05.04.80 16.10.80 10 0 Insulators Japan JY 431.4 --- JY 520.7 --- S3S330 additia. Insulators disc insulator advare fitting for 15.01.80 03.05.80 31.10.80 9 Elect. ManuflCtunia India --- 2.544 --- 2.544 te"son insulators Single & double 15.02.80 15.05.80 31.10.80 9 Tag Corporation India --- 4.164 --- 4.164 suspension Inulator Rrtthu4re 15.01.S0 03.05.80 23.12.80 11 BEdustsn Vlres Ltd India --- 5.166 -- 5.166 Accessories fot *arthvire and conductors-I 05.02.80 15.05.80 26.11.80 t0 Mc India --- 2.766 --- 2.882 Incesed Ia quantiy -II 05.02.80 15.05.80 23.01.81 12 me0 India --- 3.561 --- 8.777 Increed La quantity Shunt reactor 15.06.81 16.09.81 15.04.S2 10 EL India --- 20.488 20.48- Suspenlon Insulator 15.02.82 12.05.82 04.02.83 12 IEL India --- 6.630 --- 7.205 7.090 additional insuiltors Dilc Insulator 15.02.82 12.05.82 10.02.63 12 W.S. nsulators In,-I --- 11.407 --- 1S.670 2S3806 add4itiol insulators Double tnsion isulators --- --- 31.01.83 Idia --- 6.S00 --- 7.600 577 addittonal flttin Fittings for insulator 02.01.82 05.12.82 07.02.83 13 TAG Ind1a --- 4.610 --- 5.069 Pitting increasd by 540 Lightening arrestors 18.06.83 W.S. nsulators India --- 0.510 --- 0.510 Bus post Inasultors 14.12.82 301 Insulators Indad JY 311.3 --- 3? 365.0 --- 255 additional Insulators 2151 6.6 kV motor 15.01.87 NME Ltd. India --- 0.325 --- 0.300 Spaces for *ir compressor 12.11.66 Ingersoll Rand India --- 0.451 -_ 0.50D to' -30- AhNEX-7 CREDIS 874-IN AND LOAN 1648-IN RANANDAM IHERM OWER PROJECT PROJECTCOMPLETIONREPORT Estimated and Actual Schedulesof CumulatiyeDisburseMnt (US $ million) Actual as a percent SAR Estimat Actual estimate (a) FY80 28.0 20.0 71.4 FY81 70.0 28.8 41.1 FY82 164.0 84.4 51.5 FY83 224.0 152.4 68.0 FY84 239.0 186.5 78.0 FY85 246.0 207.5 84.3 FY86 250.0 216.2 86.5 FY87 -- 243.7 97.5 FY88 -- 250.0 100.0 S e at..._n oD..ed..i...t Source: SAR and Statementsof DevelopmentCreditsand L-oans _31- ANNEX8 INDIA CREDIT 874-IN ANDLOAN1648-IN RAMAGUNDAM THERMAL POIWER PROJECT REPORT PROJECT COMPLETION Highlights of the Commissiong and Operating Performance of the three 200 MW Ramagundam units No. Particularsof Achievement Unit-I Unit-II Unit-III 1. Date of Synchronization 26.11.83 29.05.84 13.12.84 2. (i) Date of CommercialOperation 1.03.84 1.11.84 1.05.85 (ii) Durationl/ (days) 96 155 138 3. (i) Date of Unit Attaining Full Load (MW) 21.02.84 2.09.84 10.05.85 (ii) Duration11 (days) 88 96 148 4. (i) Date of full Load Energy Output 24.02.84 9.11.84 31.05.85 (ii) Duration1/ (days) 90 164 169 5. Highest Plant Load Factor (PLF) 101.84 100.89 100.77 (2) (Jan.86) (Jan.86) (March.86) 6. Average PLF (Till 12/87) 68.68 63.51 71.10 7. AverageAuxiliary Consumption (2) (Till 12/87) 10.83 10.77 10.19 1/ Duration refers to the period from the date of synchronization to achievement of commercial,full load or full generation. INDIA CREDIT874-IN ANDLOAN1648-IN ______________________________ PROJECT POWER THERMAL RAMAGUNDAM Income Statement /1 (Re. Million) --------------- ~ FY88 FY87 FY80 FY88 FY84 FY8S - -- --- - --- - ---------------------------- - -------- -- ----- - -- ---- --- -- Forecast Actual Forecaet Actual DESCRIPTION Forecast Actual Forecast Actual Forecast Actual Forecast Actual 16750 12889 2864t 14408 29892 17538 106 947 8888 881S 6741 8816 26.90 Sales of Energy (034) 25.90 26.90 25.90 supply (P/kWh) 26.90 25.90 1.18 1.48 AverageRevenuo:Bulk 0.88 0.59 0.85 Fuel surchargp (P/kwh) 0.26 2.0S 2.05 2.05 2.06 2.06 2.06 44 /2 29 48 /2 CentralExcise (P/kWh) 86 /2 29 89 /2 29 40 /2 29 28 86 /2 28 Total Averge Revenue (Pal*/kWh) OPERATDNGREVENUE 4079 5118 6126 6291 7690 8877 276 88a 1006 1889 2264 8225 438 Sale*:Sulk supply 51 188 268 8 1S 485 87 609 9a Fuel Surcharge 80 69 179 111 828 111 CentralExcie 22 17 - 68 - 75 - 162 - 47 - 48 - 102 8782 8622 Other Incom /8 2495 8488 4586 5294 6878 6468 8oo 89s 1100 1506 Total Operating Revenue w OPERATINGEXPENSESGENERATION 681 529 1016 628 6lei eneration: 58 146 186 a86 247 707 889 538 480 Fuel - Singroull 122 81s 245 $84 a86 489 8 51 129 479 782 709 739 - Korba 84 12 122 229 272 688 -Ramgundam - - 225 128 286 a8a 6 50 - 120 2158 816S - Farraka - 641 1262 1026 1952 1621 2860 S8 146 227 06 248 24a Sub-Total Fuel 100 141 206 0CA - Singrouli s6 195 265 801 18 76 120 274 - Korba 97 164 228 - 46 177 177 - Ramagundam 11 72 120 - - Farraka - - 684 488 903 618 V96 807 _-Other 114 282 177 480 404 Sub-TotalOi 69 287 299 _99 48 9S 150 296 872 D precitieon:Singrauli 68 124 222 Korb - 22? 802 - 96 129 Rasagundm - 124 218 218 - - 67 Farraka _ _ _ Others - - 712 877 1040 448 1191 579 48 2 158 88 427 2865 4889 4850 Sub-Total Depreciatlon 1880 1921 2422 2811 86s4 8424 170 2s1 617 751 88 s8 Total Operating Expenses-G4neratlon 19 81 85 Transaisalon: 0UV /4 7 170 196 199 28 62 160 287 Deprectotion /4 191 205 284 88 71 6 11 6 68 Total Expenses-Transmission /4 9 - 14 - 10 - 21 - Other Expnue /1 Borroer's Fiscal Year. /2 Aetual Average total tariffs to consumre.r or other Income. , 4 /8 Includesconsulting /4 In actualt,includodin the total,expensesand deprciation. INDIA CREDIT 674-IN ANDLOAN1640-IN -- -- -- -- -- -- -- -- -- - - - -- - - RAMAOUNDAM THERMAL POWER PROJECT Incoe Statement /1 (Re. Million) FY63 FY84 FY8s FYss FY87 FYss DESCRIPTION ---------- Foroceat Actual Forocaet Actual Forecent Actual Forecast Actual Forecast Actual Forecnt Actual Electricity Duty 22 16 so 69 179 112 Total Oporating Expenes 823 1l 485 67 609 9a 22C 287 767 684 1788 2042 2951 2948 4268 8522 6165 Operating Income (before intereat) 76 109 4712 38 8t71 727 1896 16S6 2850 2595 29SI 8547 8910 Lose:Int.rest Chargeable to Revenue 155 6S 494 221 945 492 Lae:Wrtet-offDeferredExpense 1s5l t7O 1868 B66 2022 1240 0 - 0 - 0 - 0 - 6 - 6 - Add: PriorP.rlodIncoe 0 0 0 - 0 0 Not Inccm 0 - 0 - 0 - -79 44 -161 450 -216 904 4 1761 706 2066 Averge Not Fixed Aseote tnUse 4298 1520 2262 1904 12679 6997 28806 10957 84129 14016 41385 17209 43956 OperatingRatio (U) 75 72 28856 7O 56 71 59 65 s6 62 C5 59 5S Rat ofR turn (3) 2 6 a 11 a 13 5 17 6 17 8 to ___ - - _- - ____ - - - - -______- _ _ __-___-_ _ _ ____- ___________-__ _- -__ ________ INDIA RAMAUNOAM THEML POSERPROJECT CREOIT874-INAND LOAN 164-IN PROJECT COMPLETIN RPORT Sheet Solaonce _________________ ______________(Re. __ Million) FY88 FY84 FY85 FY96 FY87 FY8N DEMSPTION - - _ _ Forecast Actual Forecas Actual Forecast Actuel Forecst Actual Forocast Acta I Forocat Actual Assets Ft%ed Assets 6708 80 19085 9197 29778 188 41169 6047 44817 20689 48926 80508 LeesDOspreetion 87 6 297 171 884 476 1766 908 8002 1416 4892 20" Not FixedAssets in Service a621 USS 18788 9027 28894 12887 89408 16144 48895 19278 44584 28439 Work In Progres 24506 12758 20684 18767 15408 16666 6784 81069 2858 44802 0 62167 TOTAL FIXEDASSETS 81127 15726 89622 22794 44S02 8248 46187 44218 46578 68575 44584 8O626 Current Assets Cash (including book balonce) I 18 9 178 12 84 12 448 1S 134 14 6978 Short Tre Deposts 0 77 0 108 0 896 0 687 0 1068 1169 787 Receivable 25 219 92 842 206 1626 878 2284 578 2828 728 4068 Inventories 87 155 190 424 80O 704 400 940 460 1822 490 174 Lons and Advance 0 26 0 22 0 826 0 1972 0 8642 0 788 OtherCvrrent Asoet/Debtors 12 8 12 8 14 17 18 18 7 148 4 178 Totsl Current Assets 111 740 808 1762 684 8161 808 6298 1058 9127 2405 18469 Milc Capital Expenditure 0 26 0 22 0 19 0 19 0 16 0 17 ASSETS TOTAL 81287 16491 89925 24596 44886 85718 46940 626 46806 72718 46989 94112 EQUITYAND LIABIUtITES Equity Share Capital Isued 16787 11800 20418 16608 28154 20682 26851 2685 256018 82861 25618 87658 Share Dposit 0 446 0 846 0 286 0 90O 0 784 0 2806 Retained Earnings -107 50 -208 500 -486 1402 -482 8281 224 5468 1744 6511 TOTAL E4IITY 15679 11855 20145 165O 22680 22269 24969 0o906 25842 89047 27862 48974 Liabilities Loans 1550 819S 19750 5948 22107 10884 21984 17729 20812 27894 19898 87124 Current LiabI1tle 8 1442 8o 2142 61 8081 107 891 162 6778 184 9014 TOTAL DEIT 158 466 19780 8090 22168 18445 22071 21620 20964 8U71 177 45188 TOTAL Debt EITY A LILTIS A_____E =___s____ 812S7 16491 _ 21 89925 so_4_ 24696 44886 85718 46940 47_ 526 46806 72718 4_____________ 46989 94112 1 ! o INDIA RANACUNDAM THNWAL POWER PROJECT CREDIT8t4-INAND LOAN 1048-IN PROJECT COMPLETION REPORT Sources andApplicatton of Funds (Re. MlIIon) FY88 FY64 FYN6 FY86 FY87 FY66 DESCRIPTION------------------- Forecat Actu I Forecast Actual Forecast Actual Forecast Actual Forecast Actual For cat Actual SOURCES OF FUNDS Operating Income before interest 76 109 888 671 727 1890 1686 2860 2596.0 2981 8547 8910 Prior PeriodInco_(Net) 0 2 0 10 0 -26 0 s0 0 68 0 802 Dopreclition 69 2 210 60 687 265 682 877 1286 446 1390 579 Total Internal Cash Generation 145 118 548 749 1814 1682 2407 2777 8881 8482 4987 4851 Borrowing 54C0 2114 4200 2768 2600 4416 550 7865 0 10166 0 9280 Equity Contributions 4686 8969 4626 4208 2u41 4869 2197 6808 267 6909 0 6679 Capital Raceipt 0 0 0 2 0 26 0 0 0 118 0 24 TOTAL SOURCES 10280 6168 9869 7706 "665 10988 5214 10950 4096 19620 4987 20984 APPLICATION OF FUNDS Capital Expenditure (incl. IDC) 10007 6179 6706 7188 5267 10011 2717 14048 652 17606 171 17680 DoebtService Interest Chargedto Operations 155 G6 494 221 946 492 1561 570 1668 666 2022 1248 Awtization ofLonne 0 - 0 - 248 - 698 - 1162 - 1419 - TotalDebt Service 155 a6 494 221 1186 492 2274 570 8036 686 8441 1248 Increase(Decrease) in Working Capital 68 -58 170 848 200 480 228 2882 211 947 1825 2108 Provisionfor Tax 0 0 11 0 0 1 0 1 0 TOTAL APPLICATION OF FUNDS 10280 6168 9869 7706 s665 1098 5214 16960 4098 19620 4987 20664 Debt Service Covera 0.98 1.78 1.10 8.89 1.11 8.82 1.06 4.67 1.26 8.69 1.48 8.69 * Depreclation pertains to operations. Ii ANNEX12 -36- ZDZDA CRDIT 874-IN ANDLOAN1648-II ________________________________ RWUNDA THSRMALPOWER PROJECT ________________________________ PROJECTCOWF.TtIONREPORT Ex-Post Internal Economic Rate of Return (Rs. Million)* Year Capital Cost 0 &N Fuel Total Cost Total Revenue Net Benefit 0 1978-79 40 -- ^- 40 -- -40 1 1979-80 289 -- -- 289 -- -289 2 1980-81 292 -- -- 292 -- -292 3 1981-82 914 -- -- 914 -- -914 4 1982-83 1481 -- -- 1481 -- -1481 5 1983-84 1454 3 13 1470 35 -1435 6 1984-85 1486 47 222 1755 602 -1153 7 1985-86 1497 96 457 2050 1240 -810 8 1986-87 1915 99 470 2484 1276 -1208 9 1987-88 1839 99 470 2408 1276 -1132 10 1988-89 1807 168 796 2771 2161 -610 11 1989-90 1615 244 1155 3014 3136 122 12 1990-91 458 326 1547 2331 419 186 13 1991-92 233 347 1644 2224 4465 2241 14 1992-93 -- 347 1644 1991 4465 2474 to 34 2012-13 *jn constant Fourth Quarter 1987 RLepes E3RR12.5S -37- ATTACHMENT I COMMENTSFROM THE BORROWER FOR: SHRI P.V. BHIDE, ADVISER TO ED (BANK)THE WORLD BANK WASHINGTON,D.C. FROM: SHRI G. HALDEA, DIRECTOR (FB), ECOFAIRS,NEW DELHI PLEASE PASS ON THE FOLLOWINGMESSAGE TO MR. ALEXANDER NOWICKI, CHIEF, PUBLIC UTILITIES DIVISION, OPERATIONS EVALUATIONDEPARTMENT. OUR PARA-WISE COMMENTS ON THE DRAFTPCR ON RAMAGUNDAM THERMALPOWERPROJECT (CREDIT 874-IN/ LOAN1648-IN) ARE AS FOLLOWS: PARAS1.03 AND1.04: IT IS NOT CORRECT TO SAYTHATCEA HAS BEENINEFFECTIVE IN THE DEVELOPMENTOF THE POWER SECTORIN INDIA. IN FACT THE CEA HAS CONTRIBUTED POSITIVELY TO ALL ASPECTS OF POWERSECTORDEVELOPMENT. THIS MAY KINDLY BE INCORPORATEDAFTER DELETINGTHE ORIGINALFORMUIATION. PARA 3.07: ALL EFFORTSHAVE BEENMADEBY NTPC TO PROVIDECIVIL AMENITIESTO OUSTEESIN THE RELOCATIONCOLONIES,INCLUDING MEDICALFACILITIES,PERIODICVISITS BY MEDICAL OFFICERS, FREE FAMILY PLANNING SERVICESAND PREVENTIVECHECK-UPS. MORE THAN 34X OF THE OUSTEESHAVE BEEN PROVIDEDWITH EMPLOYMENTOPPORTUNITIES GIVEN THE OUSTEESLOW LEVEL OF SKILLS, IT HAS BEEN DIFFICULTTO ABSORB THEM IN SKILLED OCCUPATIONS. THE ABOVE DETAILS MAY KINDLYBE INCORPORATED IN THE PCR. PARA 3.11: AVERAGE PROCUREMENT TIME FOR THE PROJECT WAS 3.6 MONTHS FROM INVITATIONTO BID OPENINGAND7-9 MONTHS FROM BID OPENINGTO ORDERING. THIS HAS SHOWN A DECLININGTRENDIN THE SUBSEQUENT PROJECTS. FOR FARAKKA II, 53 OUT OF 60 PACKAGESTOOKLESS THAN2 MONTHS FROMBID INVITATIONTO OPENING. 39 OF THESE PACKAGESWEREFINALLYAWARDED IN LESS THAN8 MONTHS. NTPC IS IN THE PROCESSOF FINALIZINGA STANDARDBIDDING DOCUMENTWHICH IS EXPECTEDTO CUT DOWN THE TIME LAG. PARA 5.02: SERIOUSEFFORTSHAVEBEENMADE OVERTHE PAST FEWYEARSTO REDUCE THE OUTSTANDING DUES LEADINGTO A REDUCTION IN THE LEVEL OF RECEIVABLESFROM7.5 MONTHS IN 1982-83 TO 3.3 MONTHS IN 1988-89. AN ACTION PLAN OF POWERSALES SETTINGOUTA DETAILED TIMETABLEFOR THE PHASED.thDUCTIONOF THEARREARSHAS BEEN PREPARED ANDSENT TO THE BANK. IN ADDITION, THE FOLLOWING MAY MODIFICATIONS IN THE PCR BASED ALSOKINDLYBE MADE ON LATESTAVAILABLE DATA. (1) CHAPTERON "HIGHLIGHTS": THE TOTAL COST OF THE PROJECT SHOULD READAS US$693.4 MILLION INSTEAD OF US$705.6MILLION AND THE FIGURE 38.1X REPLACED BY 35.7X. -38- (II) PARA 3.7: THE FIGURE 249 LAND OUSTEES EMPLOYEDBY THE NTPC BE NODIFIED TO 250. (III) PARA 3.08: THE AMOUNT PAID FOR LAND COMPENSATION, RESETTLEMENTAND TO BE MODIFIEDTO RS.144.93 REHABILITATION MILLION INSTEADOF RS.142.9MILLION. (IV) PARA 5.04: THE SENTENCE "OI FUNDED ABOUT 60X BALANCE AS LOANS" BE ASSISTANCEFROM THE WORLD BANK AND MODIFIEDAS "GOI PUNDED ABOUT 60X (INCLUDING OTHER BILATERALFINANCINGTHROUGH WI) OF NTPC"S TOTAL REQUIREMENTSBALANCE AS LOANS." (V) PARA 5.04: THE AMOUNT OF MONEYRAISED THROUGH POWER MAYBE MODIFIED BONDS RATE) THROUGH TO RS.16.83 BILLION (US$1,122MILLION AT CURRENT EXCHANGE THREE PUBLIC ISSUES ANDTHREEPRIVATE PLACEMENTS. (VI) ANNEX 1: ANNEX1 BE REPLACEDBY ANNEX1 ENCLOSED ALONGWITH HEREWITH MODIFICATIONS. (VII) ANNEX 4: (PARA 2 UNDER"RESETTLEMENT") NO. OF PEOPLE EMPLOYEDIN THE CATEGORY "LANDBETWEEN ONE TO FIVE ACRES" BE READAS "84" INSTEADOF "83" AND THE TOTALAS "250" INSTEADOF "240." THE AMOUNT FOR LAND PAID AS COMPENSATION ACQUISITIONBE MODIFIED TO RS.138 MILLION FROMRS.136 MILLION AND THE TOTAL AMOUNT TO RS.144.93MILLION FROM RS.142.93MILL-ON. (VIII) AT PERCENTAGEOF THE ESTIMATED ANNEX 5: THE TOTAL ACTUAL PROJECTCOSib COST BE CHANGEDTO "160.9"INSTEADOF "718.2." (IX) ANNEX 8 (SL NO. 6): AVERAGEPLF (TILL12/87)FOR UNIT-I BE READ AS "68.68" INSTEADOF "66.68." (X) ANNEXES 9. 10 AND 11: THE FIGURES UNDER ACTUALS IN THESE STATEMENTSBE REVISEDAS PER THE ENCLOSEDANNEXESII, III ANDIV RESPECTIVELY. THESE REVISED ANNEXESHAVE ALREADY BEEN GIVEN TO THE WORLD BANK DURINGTHE VISIT OF THE SUPERVISIONMISSION IN FY 1989. N.T.B.T. IV F.No.6/19/79-FB Dt.18/10/89 (SANJAYMITRA) UNDER (FB) SECRETARY
Группа Всемирного банка · Project Completion Report
India - Ramagundam Thermal Power Project
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