Govt to corporatise DVC, asks PSU to expedite unbundling of 3 biz segments

At a review meeting, Power Minister Manohar Lal Khattar asked the Damodar Valley Corporation (DVC) to expedite the unbundling of its three business segments to pave the way for corporatization.

New Delhi: The government plans to corporatize the Damodar Valley Corporation (DVC), unbundling it into three entities for generation, transmission, and distribution to enhance operational efficiency. DVC Chairman S. Suresh Kumar stated on Wednesday that during a review meeting, Union Minister for Power Manohar Lal Khattar requested the PSU to hasten the unbundling process of the three segments. Kumar added that the ownership of the PSU will remain with the government even after corporatization.

At the review meeting, Khattar also suggested that the PSU consider raising funds through an Initial Public Offering (IPO) for expansion.

DVC Urged to Expand Renewable Energy Portfolio

During the meeting, Khattar emphasized the importance of DVC increasing its renewable energy portfolio. DVC plans to install an additional capacity of nearly 10,000 MW, bringing its total capacity to approximately 16,700 MW. This will include 3,720 MW of thermal power, 4,000 MW of solar power, and 2,500 MW from a pumped storage project (PSP). The total capital expenditure is estimated to be between Rs 50,000-60,000 crore. Of DVC’s nine thermal and hydro power stations, five are located in Jharkhand, while the rest are in neighboring West Bengal.

According to sources present at the meeting with the Union Minister, DVC raised concerns about grade slippages of coal supplies by Coal India subsidiaries, which affect generation costs and power tariffs, according to a PTI report. “We have also updated certain aspects of the Fuel Supply Agreement of coal to keep pace with demand. We also sought the ministry's assistance in signing Power Purchase Agreements for future capacities and recovering legacy dues,” a source said, declining to be named.

DVC has approximately Rs 300-400 crore in legacy dues out of a total of Rs 1,000 crore with the Jharkhand state government. DVC officials sought cooperation from the minister to resolve the financial issues faced by the corporation. The minister assured the company of full support from the government for its expansion plans and for the recovery of its legacy dues.