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Cover Story

“There isn’t a level playing field for SJVN.”
R. P. Singh, Chairman & Managing Director, SJVN Ltd.
Issue Date - 13/10/2011
SJVN Ltd. (formerly Satluj Jal Vidyut Nigam Limited) was incorporated on May 24, 1988 as a joint venture of the Government of India and the Government of Himachal Pradesh to plan, operate & maintain hydro-electric power projects. And since then, there has been no looking back for it. In fact, during the last two years SJVN has easily crossed the set targets which has resulted in incentive payment of Rs.2.16 billion from the government. In an exclusive conversation with Latika Sharma, R. P. Singh, CMD, SJVN, reveals the secret of company’s success and the way forward from here.

B&E: SJVN’s return on assets (ROA) increased from 12.30% in 2009 to 15.48% in 2010. How did you leverage resources to achieve the same?
R. P. Singh (RPS): SJVN’s return on assets increased from 12.30% in 2009 to 15.48% in 2010 due to decrease in net block of fixed assets, from Rs.73.19 billion in 2009 to Rs.69.34 billion in 2010 as there was charging of depreciation during the year. Further, decrease in interest and finance charges from Rs.3.05 billion in 2009 to Rs.1.50 billion in 2010 due to repayment of loan and better management of funds also helped us in achieving better return on assets.

B&E: It is mandatory for central public sector undertakings (CPSUs) like SJVN to undertake projects through Memorandum of Understanding (MoU) route only. Do you think this poses a significant setback when it comes to compete with private players in the same sector?
RPS: State governments are allotting the projects through bid proposals whereas CPSUs such as SJVN are under the obligation to execute the projects through MoU route only thereby leading to a non-level playing field. However, in this regard, certain policy initiatives are already being undertaken at the Government of India level.

B&E: What are the other challenges, in terms of policy and infrastructure, which create hindrance for hydro-electric project developers in India?
RPS: Environmental concerns, resettlement and rehabilitation issues, land acquisition problems, regulatory issues, long clearance and approval procedures, the dearth of good contractors, very remote and difficult mountainous areas, non-availability of facilities such as road network capable of handling the movement of heavy plant and machinery, shortage of availability of power equipments, the lack of indigenous manufacturing capacity are some of the the major challenges which create hindrance for hydro-electric projects developers in India

B&E: SJVN is also venturing into the wind energy field to promote and develop renewable resources of energy. How has been the progress so far?
RPS: SJVN is venturing into the Wind Energy field with an initial addition of 50MW of wind energy by the end of 2012 to promote and develop more renewable resource of energy. In pursuit of the above mission SJVN has already started surveying the various potential locations in India where the wind energy can be exploited economically. In fact, the consultant for this new venture (of setting up of the 50MW wind Power Project) has already submitted the feasibility report for establishing the project with advantages of various locations.

B&E: Your plans for 2011-12?
RPS: We are looking at achieving power generation targets of 6,900 MU for FY2011-12. Further, our priority would be to get all the clearances for expediting construction of all our planned projects for FY2011-12.



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