Currently facing excess capacity of 10-15%: Tata Power

Speaking to CNBC-TV18, Anil Sardana, MD of Tata Power says the government needs to take more steps to bring reforms in the sector. The company, which is currently facing excess capacity of 10-15 percent, says it does not have any issues on the coal supply front.

Talking about the Mundra PPA issue, Sardana told CNBC-TV18 that the Central Electricity Regulatory Commission (CERC) hearings on the matter are complete and he is expecting a ruling soon.

Below is the verbatim transcript of his interview to CNBC-TV18

Q: Do you see any material difference on the ground?

A: Tata Power is concerned takes fuel from different Coal India subsidiaries that are stationed in east grid, which is at Maithon and Jojobera. We are getting all our supplies as contracted. There are off and on issues on quality, but we get full cooperation from Coal India subsidiaries.

So, I have no complaints on that aspect. As far as the second question goes in terms of the distribution company reforms that still stays at a lip service level. There is truly no effort to give consumer service. I do not understand why government needs to be in business. Government should demand service and quality of delivery. It should allow different models like public private partnership (PPP) or whatever is prudent and the reforms must take place immediately.

Q: At any of your own locations are you faced with more power than the State Electricity Boards (SEB) are willing to buy?

A: I would say that let us not talk futuristic. We have our units which are not able to export power today to the extent they are available on the merchant side. They are available with some limited capacity, extra which we are not able to dispatch for several reasons, one of the reasons being off take.

Q: How much of your capacity is not utilized for lack of buyers?

A: Anything between 10-15 percent.

Q: talking about Mundra plant, if you indicated transferred about 75 percent of your holding in the Indonesian coal mines to Coastal Gujarat Power Ltd (CGPL). Will CGPL still have a cash flow gap and if yes, how much?

A: At the present coal rates no, it does not. At this stage, conceptual work has been done. There is no decision yet affirmatively taken to move them. There are a lot of issues that are being evaluated for the purpose of shifting that. More important for us to give assurance to the lenders that despite CGPL losing, it is not their interest repayment which will get impacted.

The assurance was in terms of the fact that if it comes, we will have this cash flow also. It will be provided as a backup to them, so that their returns and interest payouts are not impacted. So, yes, to the extent that Tata Power is obligated to return lenders money. That has been done and it is coming out of cash flows from the coal companies and the other businesses.