Govt Considering To Merge All State-run Hydropower Firms

The government is planning to create public sector energy giants with an enomous restructuring exercise that will merge all state-run hydropower firms and transfer their thermal projects to the National Thermal Power Corporation (NTPC) to create strong companies that can take on the rapidly growing private conglomerates.

As per the proposal, National Hydroelectric Power Corporation (NHPC), Satluj Jal Vidyut Nigam (SJVN), Tehri Hydro Development Corporation (THDC) and North Eastern Electric Power Corporation (NEEPCO) may be merged into one entity that will control 10,000 MW of existing and 32,500 MW of proposed capacity.

The proposal has been welcomed by the executives of big firms but it also has created a flutter among the executives of smaller companies as the merger can lead to redundancies or shift a senior manager in a small firm to a comparatively lower position in the big one. It would also abolish several positions of directors and chief executives.

Power Minister Piyush Goyal first discussed the proposal at a meeting on July 2 with the public sector undertakings and gave SBI Caps the nod to come up with a plan, a senior government official said. The official said NTPC and NHPC welcomed the proposal during the meeting. "SBI Caps has suggested merging the four hydro PSUs into one for increasing efficiency, better management and expertise. The power minister believes that one umbrella company will reduce costs and manage the related challenges in an efficient way," the official said.