CHAPTER

CORPORATE PROFILE
OF
KARNATAKA POWER
CORPORATION
LIMITED
 CHAPTER -IV

CORPORATE PROFILE OF
KARNATAKA POWER CORPORATION LIMITED

4.1: PROFILE

Karnataka was the first state in the country to conceive and set up a
professionally managed Power Corporation to Design, Plan, Construct,
Operate and maintain power generation projects in the state. General
challenges in the management of developmental activities and resources
towards electricity generation inevitable led to the founding of Karnataka
it

Power Corporation Limited on 20 July, 1970. Starting from an installed

capacity of 746 MW at its inception in the 1970, it has an installed capacity
of 4995 MW and generated 26635 MUs on 31.3.2007. Its net profit was
merely of Rs.13 lacs in 1970 rose to Rs.322 crores in 2007(Annexure No.9).

That’s the legacy that KPCL started with and built on. For over three
decades, the Karnataka Power Corporation has been a prime mover and
catalyst behind key power sector reforms in the state - measures that have
spiraled steady growth witnessed in both industrial and economic sectors.
Right from the year of inception, in 1970, KPCL set its sights on “growth
from within” meeting growing industry needs and reaching out to touch the
lives of the common man, in more ways than one. The Corporation
contributes more than 67 per cent of the electricity supply to the state. At

120
present, it owns and operates 31 dams 19 power generating stations with
capacity ranging from 0.35 MW to 1470 MW. In terms of installed
capacity, hydel capacity at 3392.27 MW accounts for 68 percent of the total
installed base, while thermal capacity at up to 32 per cent of the total and
wind mills at 0.10 per cent (Annexure No.4). In Karnataka, the biggest
project that is proposed to be undertaken in the near future is that the 1400
MW Bidadi Combined Cycle Power project, initially it conceived by the
state government in 1995, the project had been derailed midway. But now
KPCL plans to expedite the construction of the plant, so that the first unit is
ready by 2009 and expected to generate around 5000 MUs annually. For this
fast-track, gas-based project, KPCL has invited bids for EPC and financing
of EPC cost.

One of the major power projects of KPCL is the 1470 MW Raichur

Thermal Power Station located in Raichur district. It is accredited with ISO
14001-2004 certification for its environment protection measures. KPCL has
raised the bar on the quality of deliverables and is constantly working at
lowering the cost per megawatt - a commendable cost-value equation that
has become a benchmark on the national grid. KPCL’s stock in trade is
industry proven - well-established infrastructure, progressive management
concepts. It is helping to meet the challenges of the rising energy demands
of Karnataka. The leverage point of KPCL initiatives are its resource
management strengths - right across planning, financing and project
engineering. KPCL also has a high rating in terms of project completion and
commissioning within the implementation calendar.

121
4.2: MISSION STATEMENT

“The mission of KPCL is to maximize power

GENERATION BY IDENTIFYING AND DEVELOPING OPPORTUNITIES

IN POWER GENERATION, ESTABLISHING AND OPERATING POWER
plants. Constant up gradation of technical competence

AND SYSTEMS, DEVELOPING HUMAN RESOURCE CAPABILITIES

AND EMPOWERMENT ARE WAYS TO ACHIEVE THESE OBJECTIVES.

KPCL SEEKS TO BE A WORLD-CLASS ORGANIZATION

EMPHASIZING EFFICIENCY, COST EFFECTIVENESS AND HARMONY
WITH THE ENVIRONMENT”.

4.3: THE BOARD AND MANAGEMENT TEAM OF KPCL

The Chief Minster of the State has traditionally held the position of
the Chairman of the Karnataka Power Corporation Limited. The Board has
the Minister for Energy and the Adviser to the Minister for Energy as
members. Six senior bureaucrats, including the Secretary to the Chief
Minister, Principal Secretary (Energy Department of GoK) and the
Managing Director of KPTCL are also on the Board. There are four
functional directors. The composition of the Board is indicative of the
limited autonomy that the management will have on policy matters, without
being hampered by political interference. The presence of CM and the
Minister for Energy on the Board of the Corporation will not only inhibit
free and fair discussions in the Board meetings, but will also affect its
autonomy. However, a study suggests that it would be appropriate that the

122
Chief Minister and the Energy Minister must voluntarily step down from
Board positions, even if these appointments are declared as non-profit
positions under the relevant law1. It is suggested in the report that the

Board must further be reconstituted by including only up to three

Government nominee directors in addition to the functional directors. To
infuse the corporate governance practice, Government of Karnataka must
also induct up to 50* percent of the total strength of the Board of KPCL, with
independent director, to be drawn from a panel of experts in the field of
technical, financial and management functions.

The day-to-day operation is looking after by the Managing Director

from senior IAS cadre. The operation of the corporation has been divided
into two segments. One is as Engineering disciplines and the other is
Administrative Disciplines. The Engineering Disciplines is taken care of by
the Technical Director who is responsible for operation of all the power
projects in the State. Executive Directors are subordinate to him. Further it
goes down as per organization chart annexed here. In the Administrative
side, it is headed by two directors. One is Director -HRD and the other is
Director - Finance. And down the level General Manager - Administration,
General Manager - Corporate communication, General Manager -Finance,
General Manager-Accounts etc. On the technical side, Chief Engineer is
subordinate to Executive Director- Technical, General Manager -HRD is
subordinate to the Executive Director. Under the chief engineer, three
Superintendent Engineers who are heading different disciplines like Civil,
Mechanical and Electrical departments.

1 “ Study on “Impact of Restructuring of State Electricity Boards”, a State Reports on Karnataka,

Carried out by Indian Institute of Public Administration (IIP A), Volume I -III), Hyderabad, Pp 3.29.

123
 Chairman
[Chief Minister of Govt, of Karnataka]

Vice Chairman
[Minister of Energy / PWD of G o K]

__________ * ___________
Managing Director - IAS

f Director- 1
Director - Director- [ Director- ] Director- | Director- | Director- |
Director- f Director- 1
Technica HRD Finance MD Secretary Director Principal Principal Principal

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of General Secretary Secretary
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t

KPTCL WRD
CPRI 1
Finance Chief
ED-T ED-HRD ED- Minister, to Energy/
Dept. GoK
Financ GoK

CE GM-
GM-Finance DGM-F GM-A A = Accounts
HRD F = Finance
AO = Accounts Officer

w
AAO = Assistant Accounts Officer

r
AEE = Assistant Executive Engineer

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2
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DGM-A ED = Executive Director
CE = Chief Engineer

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SE-Civil SE-Mech SE-Ele DGM- HRD SE = Superintendent Engineer
'

EE = Executive Engineer
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* k
M = Mechanical
AGM-HRD
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124
 Then as subordinates, there are Executive engineers and Assistant
Executive Engineers at the respective plants. There are total 2301 corporate
officers and 3936 workmen.

In 1993 the total installed generation capacity of the power plants of

KPCL was at 1990 MW with the work force at 8,200 employees. Presently
as of March 2007, the total installed generation capacity stands at 4995 MW
with strength of workforce are 6,237 employees (As on 1.1.2008). It is
evident over a period, Human/MW capacity ratio has come down drastically
from 1.62:1 in FY 2002-03 to 1.35:1 in FY 2006-07 which has helped to
increase employee productivity and promotion of team work.

4.4: FINANCIAL PERFORAMCE OF KPCL

Financial performance of the corporation is discussed in the following

table.

Table 4.1: Financial Performance of KPCL for the five years

(Rs. In Crores)
PARTICULARS 2002-03 2003-04 2004-05 2005-06 2006-07
Equity Paid up Capital 662.98 662.98 662.98 662.98 662.98
Reserves & Surplus 1315.22 1375.48 1599.81 1836.27 2262.37
Total Loan Funds 2845.27 3391.34 4038.14 4756.14 5055.52
Total Fixed Assets 3635.10 3777.81 4046.21 4483.56 5489.99
Net Current Assets 1146.07 1616.32 2199.01 2739.00 2472.70
Total Turnover 2164.04 2496.68 2617.04 2669.56 3750.37
Total Expenditure 1916.12 2227.48 2349.59 2325.00 3379.31
Profit After Tax 240.69 223.23 239.46 251.58 322.32

125
PARTICULARS 2002-03 2003-04 2004-05 2005-06 2006-07
Book Value per share (Rs.) 2983.79 3074.69 3413.05 3769.71 4412.42
ROCE (percent) 12.17 10.95 10.58 10.07 11.02
EPS (Rs) 363.04 336.71 361.19 377.47 486.17
Dividend (percent) 2 2 2 2 2.24
Dividend per share (Rs.) 20 20 20 20 22.42
Debt Equity Ratio 1.44:1 1.43:1 1.72:1 1.82:1 1.66:1
Current Ratio 3.19:1 4.63:1 5.09:1 8.32:1 3.72:1
DSCR 1.03:1 2.44:1 2.61:1 2.19:1 2.20:1
Source: Annual Report of KPCL for FY 2002-2007

As compared to the FY 2002-03, with the same amount of paid up

equity capital of Rs.662.98 crores, over the five years, the accumulated
reserves and surpluses has increased at 72 percent in FY 2006-07 and total
turnover has increased from Rs.2164.04 crores in FY 2002-03 to FY
3750.37 crores in FY 2006-07 with a growth of 73 percent over the five
years and profit after tax is up by 34 percent (Annexure No.9). Book value
per share has increased by 48 percent and EPS is increased by 34 percent
over the FY 2002-03. Return on assets and debt-servicing capacity are at
comfortable level. However the dividend payout is very meager as
compared to the other power generation companies in the country like
NTPC, Reliance Energy Ltd and The TATA Power Company Ltd.

126
 4.5: OPERATIONAL PERFORMACE OF KPCL

Operational performance of the corporation is discussed in the

following paragraphs.

Table 4.2 Operational Parameters for the five years

PARTICULARS 2002-03 2003-04 2004-05 2005-06 2006-07
Installed Capacity (MW) 4350.48 4365.48 4640.50 4640.50 4994.82
Capacity addition during year 228.00 15.00 275.00 0 354.32
Total Electricity Generation
(MUs) 17138 18426 18993 19888.93 26635.35
- Thermal 10292 11393 10731 9164.72 11483.43
- Hydel 6835 7017 8247 10709.12 14997.45
-Wind 11.00 16.00 15.00 15.09 14.93
- DG Set at Yalahanka, B’lore 0 0 0 0 139.54
Source: Annual Report of KPCL for FY 2002-2007

Electricity generation during the FY 2006-07 was achieved at 26635

MUs, which is up by 55 percent as compared to the FY 2002-03. The Plant
Load Factor at the thermal power station has achieved at 89.17 percent in the
FY 2006-07 with auxiliary consumption of 8.22 percent. The specific coal
consumption is at 0.65 Kg/Kwh and specific oil consumption is at 0.44
Ml/Kwh. whereas plant availability factor ahs achieved at hydroelectric
power plant at 93.25 percent. The installed capacity has increased at 14.81
percent whereas the electricity generation has increased at 55.42 percent
during the five year period.

127
Figure 4.1 MAP OF POWER PROJECTS OF KARNATAKA POWER
CORPORATION LIMITED IN THE STATE AS ON 31st
MARCH 2006.

KPCL Power Projects

N
A

_ Bijapur
Almatti DamRawer
House(290MW) Raichur Thermal
Power Station(1470 MW)
7 Belgaum
Kali Hydel T
Project(1225MW)K jAhaiwa|P <.K°PP*L
Bellary Thermal
Kappadagudda Power Station(500 MW)
(4.555 MW)

Sharavathi Hvdel
Project(i330 MWf A

Varahi Power Station

(239 MW)
♦ V"JvfBidadi Combined Cycle
ilandya ^ BatJgalore Power Station (1400 MW)
Ko^agu \^Mysore.
■Charn/rijanagar

*Bidadi Combined Cycle Power Station (1400 MW) is belonging to KPC BIDADi
POWER CORPORATION PRIVATE LIMITED, which is a subsidiary of KPCL. The
present status of the project has been dealt with in detail separately.

128
 4.6: EXISTING PROJECTS LOCATED AT KARNATAKA.

The following table shows the important power projects of KPCL in

Karnataka.

Table 4.3: Power projects of KPCL in Karnataka(in MWs)

POWER STATIONS 2002-03 2003-04 2004-05 2005-06 2006-07
Sharavathi Generating Station 1035.00 1035.00 1035.00 1035.00 1035.00
Linganamakki Dam
Powerhouse 55.00 55.00 55.00 55.00 55.00
Bhadra Dam powerhouse 33.00 33.00 33.00 33.00 33.00
Kali stage I Nagjhari
powerhouse 855.00 855.00 855.00 855.00 855.00
Supa Dam powerhouse 100.00 100.00 100.00 100.00 , 100.00
Varahi underground
powerhouse 230.00 230.00 230.00 230.00 230.00
Mani Dam powerhouse 9.00 9.00 9.00 9.00 9.00
Ghataprabha Dam powerhouse 32.00 32.00 32.00 32.00 32.00
Kalmala,Sirwar,Ganekal &
Mallapur 10.75 10.75 10.75 10.75 10.75
Kadra Dam powerhouse 150.00 150.00 150.00 150.00 150.00
Bhadra right bank 6.20 6.20 6.20 6.20 6.20
Kodasali Dam powerhouse 120.00 120.00 120.00 120.00 120.00
Gerusoppa Dam powerhouse 240.00 240.00 240.00 240.00 240.00
Almatti Dam powerhouse 0.00 15.00 290.00 290.00 290.00
Kappadagudda Wind
Farm,Gadag 4.53 4.53 4.55 4.55 4.55
Raichur Thermal Power Station 1470.00 1470.00 1470.00 1470.00 1470.00
Munirabad Power House 0 0 0 0 28.00
Mahatma Gandhi Hyd Ele
Station 0 0 0 0 139.20
KSheshadri Iyer Hydro
Elect Station 0 0 0 0 42.00
Shimsha Hydro Electric Station 0 0 0 0 17.20
Yelahanka DG Station 0 0 0 0 127.92
INSTALLED CAPACITY IN
(MW) 4350.48 4365.48 4640.50 4640.50 4994.82
Source: Annual Report of KPCL for FY 2002-2007

129
 As on 31.3.2007, the Corporation has total installed capacity of
4994.82 MW. Out of which, hydroelectric power projects are accounted at
3392.27 MW which are located at various places in the State. Wind power
projects of 4.55 MW capacities at Gadag district, Diesel generators of
127.92 MW at Yelahanka in Bangalore and rest of 1470 MW of thermal
power station located at Raichur. The review of major hydro electric
projects and thermal power projects are enumerated below.

Graph N©.4.1: Installed Capacity of KPCL (MW) as on 31.03.2007

GROWTH OF INSTALLED CAPACITY OF KPCL FOR

THE LAST37YEARS

FINANCIAL YEARS

■ Hydro ■ Thermal a wind

The thermal power stations commenced during 1984-85 whereas wind

power projects started during 2000-01. Every year it is going on adding
installed capacities. The major hydroelectric power projects, thermal power
projects and wind power projects are discussed as under.

130
4.7: THE SHARAVATHI HYDRO ELECTRIC PROJECT

This project originating at a height of 730 meters near Ambuthirtha in

Shimoga District, the Sharavathi River flows in a north-west direction. In its
long 132- km journey, the Sharavathi is joined by several tributes, at the 80
km of its course, this river leaps an astonishing depth of 293 meter as the
famed Jog Falls. From its extraordinary leap, the Sharavathi continues its
journey till it merges with the Arabian Sea near Honnavar. Recognizing the
awesome potential of this mighty river, KPCL embarked on the Sharavathi
Hydro Electric Project, which today forms the backbone of the State’s power
generation. This project has Generating Station with its 10 Units has an
installed capacity of 1035 MW and the Linganamakki Dam Powerhouse
with 2 Units has an installed capacity of 55 MW. To further tap the potential
of the Sharavathi River, KPCL has embarked on the Gerusoppa Dam Project
with 4 Units of 60 MW each; the installed capacity of the Gerusoppa Dam
Powerhouse will be 240 MW.

The unique feature of this project is the establishment of 1035 MW

capacity under single roof with equipment from USA, Canada, France, Japan
and other countries with an annual generation of 5000 Kwh. The generating
units have been recently renovated and upgraded. KPCL proposes to make
the Sharavathi Station a “Mother Station” by controlling all the peripheral
stations through remote control. Through integrated operation of several
reservoirs and water conductor system in the projects, KPCL has been able
to optimize power generation.

131
4.8: THE KALINADI HYDRO ELECTRIC PROJECT

Like the Goddess Kali, after whom it is named, the Kalinadi is a black
river. And like the powerful goddess, this river too, releases endless energy.
The west flowing Kalinadi has its own origin at an elevation of 900 meter
near the Diggi village in the Western Ghats of Karnataka. Its 160-km long
journey ends at the Arabian Sea near Karwar. The estimated power potential
of the river is about 1700 MW with an annual yield of 6500 MU. So far
1210 MW has been harnessed from two Stages. In stage I of the project, the
101 meter high Supa Dam was built across the Kalinadi in Joida Taluk of the
Uttara Kannada District. Fraught with problems and difficulties, the
construction of the Dam was daunting task, posing new challenges to the
engineers and geologist of the job. Today, the Dam stands as testimony to
the “never-say-die” spirit of KPCL and its people. The Supa Dam Power
house has an installed capacity of 2x50 MW with an annual energy
generation of 450 MU. The generating units were commissioned in 1985.
Also part of stage one of the Kalinadi hydro electric projects are; The Upper
Kaneri Dam built across the Keneri river - a tributary of the Kalinadi. The
Bommanahalli Pick-up Dam. The Tattihalli Dam, and the Nagjhari Power
house (4 Units of 135 MW and 2 Units of 150 MW).

The construction of the composite Kodasalli Dam in 1989 marked the

beginning of the Stage II of the Kalinadi hydroelectric project. This stage of
power development in the Kalinadi Valley comprises dams and power
houses across the Kalinadi, near the villages of the Kodasalli (Yellapur
Taluk)and Kadra ( Karwar Taluk) of Uttara Kannada District. The Kadra
power house (3x 50 MW) and Kodasalli power house (3x 40 MW) will

132
contribute 270 MW of installed capacity with an yield of 1080 MU per

annum.

4.9: THE VARAHI HYDRO ELECTRIC PROJECT

The river varahi takes its birth at the hight of 730 meters in the
Western Ghats at Hebbagilu near Agumbe in Shimoga District. It joins the
Areaibin Sea near Kundapur.After a short journey of just 25 Km this swift
and powerful river falls 445 meters in cascades to form the lush Kunchikal
falls. Occuping pride of place on this project is the State’s first underground
powerhouse, a significant milestone in the corporate history of KPCL.
Contempleted as a surface powerhouse in the early project reports, it was
later concerted into a underground powerhouse for not just technical and
economical reasons but also because of an abiding concern for the
environment. The move to shift the powerhouse down by more than 300
meters through a several challenges, each tackled after careful analysis by
the in-house technical experts and design engineers. Modem tunneling
methods were used to create the entire powerhouse complex, which houses
the generating units. The pressure shafts, penstocks, tailrace tunnels, the
control and power cable tunnel, the ventilation tunnel and the access tunnel
are all underground.

Stage one of the Varahi hydroelectric project has a total installed

capacity of 239 MW contributing 1100 MU annually. This consists of 2 x
115 MW generating units Varahi Underground powerhouse and 2 x 4.50
MW at the Dame power house at the Mani Dam site. There is a provision far
adding two more Units of 115 MW leveraging the infrastructure of the first

133
Stage and without the problems of approaching land acquisition,
resettlement or environmental concerns.

4.10: GHATAPRABHA HYDROELECTRIC PROJECT

The Ghataprabha a major tributary of the river Krishna, emerges at a

height of 1020 meters, in the Western Ghats, near Ambi, then flows on in an
a easterly direction for a distance of 283 kms, before it joins the river
Krishna at Kudalasangama, in Bijapur District. The river then drops 53
meter at the famous Gokak falls. The powerhouse located on the right bank
of the river has an installed capacity of 32 MW and an annual yield of 131
MU.

4.11: BHADRA DAM POWER HOUSE

The two river bed Units of 12 MW each and a canal Unit of 2 MW are
part of the existing Bhadra Dam left bank Powerhouse. On the right bank,
the powerhouse consists of one Unit 6 MW and one Unit of 7.20 MW.
Together, all these Units have total installed capacity of 39.20 MW and an
annual generation of 70 MW.

4.12: RAICHUR THERMAL POWER STATION

Basically generation of electricity in Thermal Power Plants is through

a series of energy conversion stages. Fuel is burned in huge Boilers to
produce high-pressure steam. The steam then expands and drives the turbine.
The mechanical energy of the turbine is converted into electrical energy by a

134
generator. Till 1978 Power Generation in Karnataka was confined to Hydro
Electric Projects only. Subsequently KPCL Embarked opens the
construction of a thermal power station at Raichur during 1985-86. Today,
RTPS is ranked one among the top ten power stations in the country. This is
hole-based power station at Raichur, which generates on an average 32
million units per day from (7x210 MW) units. The first 4 units were
commissioned between the year 1978 to 1994 and unit 5 & 6 in 1996. And
Unit-7 commenced in year 2002. It was created a New National Record in
the history of Thermal Power Project implementation with in 25 months.
KPCL has envisaged on implement of another unit 8 on a fast track basis.
The key factors for the projects are easy availability of coal, water and
transport were the parameters worked on ■' to select the site. And the
Corporation recommended Raichur as the ideal location that would provide
the all-important facilities, like Coal was assured from the Singareni
collieries and supplemented by the Western Coal fields. Regular inflow of
water was possible from the adjacent Krishna river and in summer the flow
would be regulated from the Almatti and Narayanapur reservoirs. Vast land
was available for disposal of Ash. A broad gauge railway line was available
at close quarters connecting the site to important cities and also national
highway run through the location (Annexure No.4).

4.13: WIND POWER FARM AT KAPPADAGUDDA, GADAG

Generation of electricity from wind power is being explored from this

region. As per the preliminary data available with KPCL, Kappadagudda is
having wind energy source of 28 to 30 Km annual mean speed over a belt of
30 Km long. From this region, it may be possible to have an installed

135
capacity of 100 MW with an annual yield of 200 MU approximately2. This

Project was completed in 1995-96. This is the first Wind Energy Scheme in
Karnataka. This Project generates 4 MU annually with an installed capacity
of 2.025 MW (9 units of 225kw). As an expansion of this project 11 more
units of 225kW each (2.47 MW) have been added during July 2002. With
this the total installed capacity of wind farm is 4.5 MW (20 units x 225 kW)
and the total annual energy benefit is 12 MU. This project has generated
14.93 MU in FY 2006-07. As has been assessed by the Geological Survey of
India and Karnataka Renewable energy Development Corporation Limited
(see the annexed map of spatial distribution of wind power density -Wm-2 at
30 meters above ground level in Karnataka. Dark area of region has high
potential of wind velocity). It is estimated that there is a huge potential of for
wind power projects in the region of Belgaum, Chitradurga and Gadag
districts. The corporation is aimed at 20 MW and above for the set up of
wind power projects. Therefore most of the proposed wind sites have been
allotted and encouraged to private parties in the Gadag, Chaitradurga and
Belgaum districts.

4.14: PROGRESS ON BIDADI COMBINED CYCLE POWER PLANT

The KPCL has embarked upon a major Power project, this is based on
Combined Cycle Power plant near Bangalore. The project was to be initially
implemented as a joint venture with M/s. UNCOCAL Corporation of USA.
The proposal of the Naphtha based project was shelved due to the increase in

2 Draft Perspective Power Plan of Karnataka (May 1992) for the period (1992-2007),
Energy Sector, Generation, of Karnataka Power Corporation Limited, Pp. 5-45.

136
cost of naphtha in the international market. Government of India and
Government of Karnataka have changed their policy and are not
encouraging the liquid fuel based projects. Subsequently Government of
Karnataka has allotted 700 MW (2x350 MW) power station based on LNG.
Based on KPCL Board decision to enhance the capacity of plant from 700
MW to 1400 MW on natural gas to have the benefits of mega projects status,
GoK has approved the higher capacity. Consequent to this, the KPCL has
formed separate Special Propose Vehicle (SPV) to implement the project.

Government of Karnataka order was received for enhanced capacity

of 1400 MW on 30.10.2003. DPR was sent to Ministry of Power for
obtaining “Mega Power Project” status. Clearances have been received
from Airport Authority of India Limited and Fisheries Department. Other
statutory clearances for enhanced capacity are being obtained. Revised
Rapid EIA studies report was sent o KSPCB on 26.2.2004. Public hearing
was held on 16.10.2004. Consent for establishment was received from
KSPCB on 07.01.2005. The promoter company KPCL had advanced an
amount of Rs. 11.17 crores towards consideration for the land acquired
through KIADB for the Bidadi power project. Pending the final decision on
the entity to implement the power project, the registration of land is kept on
hold.

It is 32 km away from Bangalore city is a unique eco-friendly Project

taking share which. This is a first project to use sewage water. The first
stage of this project of 1400 MW capacity at an a estimate cost of Rs. 3750
crores. LNG supply is being tied up through competitive building. The
most advanced technology was utilized to up rate all the 10 units of the

137
Sharavathi Power Generation Station from 89 MW to 103.50 MW. In
Nagazhari Power House have been up rated from 135 MW to 150 MW.
KPTCL have a established computerized satellite communication net work
through VISATA amount all its power stations in Bangalore during June
1997. With its existing rich experience and expertise the KPTCL has
forayed in to consultancy and engineering services by offering services like
feasibility studies and preparation of detailed of Project Report, Design,
Engineering, Procurement and Construction Services related to Thermal and
Hydal Power Stations. .

Gas Supply: Bids were floated on 23.5.2003 for supply of gas. Pre­
qualifications applications were opened on 21.7.2003. Bid documents were
issued to the pre-qualified bidders in November 2003. Revised bid
documents incorporating clarifications to queries raised by bidders were
issued to the bidders.

The Techno-commercial bids received from following bidders were

opened on 24.3.2004.
1 M/s Petronet LNG Ltd(PLL,ONGC,BPCL)-RLNG
2 M/s Reliance Industries Limited - NG
3 M/s Kakinada IOLC (IOC, Petronas & Kakinada Sea Ports)-
RLNG.

In-house evaluation of techno-commercial bids was received by the

Panel of experts consisting of eminent personnel in this field constituted
(constituted on approval of Board in the 193rd meeting held on 29.12.2003)

138
Negotiations with the bidders were held during June 2004 to freeze teehno-
commercial bids.

The final Request for Proposal and draft Gas Purchase Agreement
were issued to the gas supply bidders on 27.9.2004 requesting them to
submit price bids on 25.10.2004. In response to our letter, M/s Kakinada
IOLC and M/s Petronet LNG Ltd.., sought extension of time up to
30.12.2004 and another 6 months respectively. Technical Committee
recommended that extension of time to be given up to 30.12.2004. Price bids
were scheduled to be opened on 30.12.2004 but all the pre-qualified bidders
did not submit their price bids on the scheduled date.

EPC bid: Bids for EPC works were floated on 16.6.2003. The pre­
qualifications bids were opened on 15.9.2003. Bids were issued to the
following pre-qualified bidders on 24.6.2004.

1 M/s Siemens Germany- manufacturer

2 M/s Alstom, Switzerland - manufacturer
3 M/s Sumitomo Corporation, Japan - EPC Contractor
4 M/s Marubeni Corporation, Japan - EPC contractor

Pre-bid meeting will be scheduled after opening of gas supply price bids.

Water supply pipelines: BWSSB has been addressed for taking over
the tertiary treatment plant or any other suitable long term

arrangement.

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 Shifting of existing pipeline: In view of construction of four lane
Bangalore to Mysore Road (SH-17) about 17.5 km (out of 21.6 km) of
existing raw water supply pipeline already laid and commissioned is
shifted. The work is in progress.

Financial Expenditure: An amount of Rs.27.03 crores has been spent

on the project so far.

Technical Committee in its 171st meeting held on 07.4.2005 observed

that these firms had their reasons for not seriously participating in the KPCL
tender. The committee recommended to constitute an empowered committee
comprising of Dr. MR Srinivasan, Prof Soundaranayagan formerly of IISc.,
a representative of the GTRE, Principal Secretary Department of Energy,
MD, TD, FD to explore the options for obtaining gas including discussions
with various sources like ONGC, IOC, GAIL, etc.

KPCL is close to finalizing the fuel supply agreement for the project.
In June 2003, the corporation tendered for sourcing natural/regasified
liquefied natural gas. KPCL also proposes to enter into a power purchase
agreement with bulk buyers such as the Power Trading Corporation. Among
the other projects in the pipeline are the 210 MW eighth unit of Raichur
thermal power station, the 500 MW Bellary thermal power project and 290
MW Almatti dam powerhouse project. These are likely to provide much-
needed relief to the state. In fact, in 2002-03, the peak demand praised in the
state stood at 6198 MW, as against the 4805 MW that was available, a
shortfall of 22.50 percent. Total power generation in Karnataka has
increased only marginally in the past five years and has shown a decrease as

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compared to the corresponding figures in 2001-02,as against load growth of
around 8 per cent. This has increased its reliance on relatively expensive
sources outside the state, straining state finances.

Like most other power sector players, KPCL, with its long-standing
experience in the sector, has also stepped into Consultancy and Engineering
Services division offers a wide range of services in different aspects of
power project development ranging from feasibility studies and preparation
of detailed project reports to design, EPC services, project management,
operation and maintenance services. KPCL has maintained high efficiency
standards over the years and its overall performance has been good. One of
the reasons is a consistently good plant load factor of about 90 per cent in
the thermal generation units, making it one of the most efficient thermal
generators in the country. In Karnataka, water levels in the catchment areas
where the hydel reservoirs are located have been on the decline. And, as
against an average inflow of 287 thousand million cubic feet (tmcft) in the
state.

4.15: BALLARY THERMAL POWER STATION (1 Unit x 500 MW)

The prestigious BTPS is KPCL’s effort to review the glory of Vijaya

Nagar Empire. The project is located near Kodatini Village about 22 kms
from Ballary. Which was proposed to developed two stages of 500 MW
each which will add 3300 MU per annum from stage one. The project cost
has been estimated at around Rs. 2100 crores (with a debt of Rs. 1680
crores + equity 420 crores ). The power will be evacuated through the 400
KV transmission line of KPTCL and will be connected to the Davengere

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Sub Station. Here the infrastructure for expansion up to 1500 MW’s. The
plant work has been commenced by the BHEL during 2003 on EPC’s basis
and financial closure achieved in May 2004 with SBI c for debt portion of
1680 crores through the bid route. 220 Hectares of land is under
development as a green belt along with project works. The EPC contract
assigned to BHEL is scheduled for implementation of the project is 36 to 39
months.

The boiler weighing 215 MT has been lifted, placed and aligned in its
position, one month ahead of best effort schedule in February 2005.
Chimney reached the final height of 275 meters. TG Deck concreting
completed and cooling tower reached a full height of 143.50 meter. Boiler
hydro test was completed and light up was carried on successfully. Laying of
pipeline for water supply works from Marihalla to BTPS plant site
completed and pumping of water commenced. The project is expected to be
ready for supply of power to the State grid from September 2007. However,
due to technical problems and EPC contract delay, it is under progressive

way.

4.16: BALLARY THERMAL POWER STATION UNIT-II

(1 Unit x 500 MW)

Government of Karnataka has allotted additional 500 MW BTPS unit

2 to KPCL. The cost of project is Rs.2096 crores, efforts are made to get a
dedicated coal block. Letter of Intent has been issued to M/s. BHEL for EPC
package in the month of August 2006, and the work will be commenced
after obtaining clearance from the Ministry of Environment and Forestry.

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4.17: VARAHI HYDRO ELECTRIC PROJECT STAGE - II
( 2 Unit x 115 MW )

This project was conceived and designed for implementation in two

stages. First stage comprises of two units of 115 MW each has been
successfully commissioned during 1989-90. In order to augment the peaking
capacity, implementation of the Varahi Hydro Electric Project Stage II is
taken up. The cost of the project is Rs.291 crores, here Civil works including
supply, fabrication and erection of steel liners has been awarded to M/s.
IHP/SNP consortium and the work is in progress. Electro mechanical works
has been awarded and the work is in progress. Model test to check the
efficiency of the hydraulic profile of turbine runner and distributor was
conducted in January 2007. Cumulative project expenditure is Rs. 63 crores
as of March 2007.

4.18: RAICHUR THERMAL POWER STATION - UNIT 8 (250 MW)

This is an expansion power unit adjacent to existing seven units of

capacity 210 MW each. GoK allotted the project to KPCL in June 2003. The
cost of the project is Rs.944 crores. Letter of award has been issued to M/s.
BHEL for Boiler Turbine Generator package in March 2007. Letter of
Award has been issued for Station building, cooling towar in June 2007 and
re-tendering for Chimney is under progress. The work has been commenced.

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4.19: OTHER PROPOSED PROJECTS

Considering the growing need for power, GoK has entrusted KPCL
with the development of new thermal power projects and Hydel projects
totaling to 7500 MWs. Up-rating of the Nagjhari Power House of 45 MW.
The existing units of 135 MW are planned to be up-rated to 150 MW
capacities, Units 1, 2 and 3 have been up-rated, presently unit 4 is under
renovation, modernization and up-rating works and the same is likely to be
commissioned. Unit 5 and 6 are likely to be commissioned during July 2008
and March 2009 respectively. Gundia Hydel Scheme - (2x200 MW),
Government of Karnataka has allotted the project to KPCL in October 1998.
The detailed project report has been prepared on Topo Sheets and the same
has been sent to Central Electricity Authority in June 2006 for inclusion of
iL

the project in the 11 Five Year Plan. Techno Economic clearance is awaited
for the project.

Governments of Karnataka vide GO No. EN 76 PPC 2006 dated

13.7.2006 has allotted six new coal based thermal plants to KPCL. Out of
six, two power projects have been entrusted to KPTCL. In view of changes
in location, Government of Karnataka has been moved to allot the under
mentioned projects.

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 Table 4.4: District wise proposed power projects in Karnataka
SI.No PROJECTS CAPACITY DISTRICT
1 Kalgurki Thermal Power (3 x 500 MW) Bijapur
Station 1500 MW
2 Yeramarus Thermal Power (2 x 500 MW ) Raichur
Station 1000 MW
3 Annechakkanahalli Thermal (3 x 500 MW) Hassan
Power Station 1500 MW
4 Yadgir Thermal Power (2 x 500 MW) Gulbarga
Station 1000 MW
5 Edlapur Thermal Power (1 x 500 MW) Raichur
Station 500 MW
6 Bellary Thermal Power (1 x 500 MW) Bellary
Station (Unit-3) 500 MW
7 Kuduthini Thermal Power (3 x 500 MW) Bellary
Station 1500 MW
TOTAL CAPACITY: 7500 MW 5 Districts
Source: Corporate profile of KPCL 2006.

4.20: INFORMATION TECHNOLOGY FACILTY IN THE

CORPORATION

KPCL is a highly information technology Savvy corporation amongst

all the public sector undertakings in the State. It has established
SHAKTINET - a satellite based communication network through V-SATs
among all its power stations and Bangalore. Local Area Networks have been
established at all project locations and about 800 officials have been wired to

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corporate office with reliable V-SAT backbone. All the activities of the
corporation are computerized and KPCL has unique distinction among
power utilities of establishing voice and data communication between its
projects and Bangalore through the new generation DAMA V-SATS on
KPTCL’s VIDYUTNET. The computer service department of KPCL with
fully dedicated engineers and software professionals has developed and
implemented all the software required for its business activities and is geared
to offer consultancy services in the field of software development and
networking in the power sector.

Some of the software developed in-house are:

1. Fuel Management System

2. Human Resource Information System
3. Cash and Compilation Management System
4. Establishment System
5. Integrated Inventory Management System
6. Public Deposit System
7. Generation Management System
8. Billing Software for Bellary Thermal Power Station
9. Medicine Procurement System

4.21: NEW INITIATIVES TAKEN UP BY KPCL

• It has established 2MBPS MPLS circuits between Bangalore and two

of its major projects viz., Raichur Thermal Power Station and Bellary
Thermal Power Station for speedy communication.

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 • Extension of the above facility to other Project locations in the near
future.
• Established Video Conferencing facility at major project locations.
• Exploring the possibilities of establishing The Supervisory Control
And Data Acquisition (SCADA) facility at major project locations
through Fibre Optic Cabling using State of the art technology.

The computer service department has set for itself very high standards and
firmly believes that “it is not the IT infrastructure of a few crores that needs
to be managed but business that gets transacted over the network that needs
to be managed.”

4.22: TECHNICAL CONSULTANY SERVICES

KPCL today has the capability to undertake large scale power

projects from concept to commissioning. It can also operate the plant on an
EPC basis, with a host of exclusive auxiliary services. KPCLs Consultancy
and Engineering Services Division, an offshoot of its core competency,
offers its clients a wide spectrum of consultancy inputs across the complete
cycle of power project development. It has the expertise in analysis and
design of structures using STADPRO - 2006, NISA - Finite Element
package, AUTOCAD - 2006, micro station and in-house developed software
packages for reservoir operation, Stability of Dams etc., Feasibility studies /
evaluation and the compilation of detailed project reports.

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 • Design, Engineering, procurement and construction services
• Consultancy on both Thermal and Hydel Power Stations, including
handling of international competitive bids
• Project Management from project scheduling to preparation of final
invoice and certification.
• Supervision of erection, commissioning and operation of civil,
electrical, mechanical systems and equipment.
• Operation and maintenance services,
• Rehabilitation of dams in distress
• Renovation, modernization and updating of hydro stations
• Overall project and performance management.

4.23: ASH UTILIZATION AT RTPS

A useful bye-product, ash in the form of fly ash, bottom or pond ash is
available at the Coal and Lignite based thermal Power Plants. It needs to be
utilized in various ways and applications. The future capacity addition will
take into account the capabilities to ensure safe utilization of fly ash, bottom
ash and pond ash. Ash has specific utilities depending upon the
characteristics and Engineering properties. Based on the properties; the ash
can be processed to enhance its utility. The safe Environmental concerns
cannot afford to increased ash pond areas; increased heights of ash dykes; as
well as the likely pollution it may have in air, surface water and the Ground
water. The ash in its natural form may not be free from likely environmental
hazards.

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 The protections from environmental hazards that can be anticipated
necessitate 100 percent ash utilization in a variety of ways. Ash needs to be
converted into ash based products and utilized so that ash does not fly in air;
it does not get washed away with surface water flow and also does not get
leached to cause ground water pollution. Safe utilization of ash is essential.
Ash Utilization therefore needs to be a continuous activity at all the coal and
lignite based thermal power stations. Ash utilization is an industry in itself
and fly ash based industry needs to be developed at the thermal power plants
in the immediate vicinity and the ash dump areas. It will provide
employment opportunities to many in the nearby villages. Ash utilization has
corresponding benefits in reducing the requirement of ash pond areas, ash
handling system, consumptive power and saves time and energy that is
utilized for creating these infrastructures. Ash based product bring return to
the society and therefore the effect on tariff is negligible. The expenditures
on ash utilization, promotional measures and facilitation component are
essential.

The targets of ash utilization are primarily governed by the

MOEF(Ministry of Environment and Forestry) Notification dated 14th
September, 1999 and its amendment notification dated 27th August, 2003 as

well as Hon’ able High Court of Delhi directions vide its judgments dated
4th December, 2002, 10th March, 2004 as well as 5th August, 2004. The

existing thermal power plants as on September 1999 are to achieve ash

utilization level of 100 percent in a phased manner by 2013-14 in
accordance with 15-year action plan as per notification dated 14th September

1999 and with effect from the date of publication of the notification. The
new power plants subsequent to September 1999 are to achieve ash

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utilization level of 100 percent in a phased manner as per 9-year action plan
and with effect from the date of publication of the notification dated 14th

September 1999. Besides, MoEF has also issued an amendment notification

dated 27th August, 2003 and has extended the scope of ash utilization by

various construction agencies by stipulating specific targets for those within

50 km & 50 to 100 km radial distance of the location of thermal power
plants. Construction agencies located within 50 km are to achieve ash
utilization level targets of 100 percent up to August 2005 and those located
from 50 to 100 km distance are to achieve ash utilization level of 100
percent by August 2007.

Subsequent upon nine years from September 1999, the future strategy
shall endeavor on planning for 100 percent ash utilization from the initial
stage of commissioning of the projects. All power plants are expected to
have well tied up program of ash utilization by user agencies, dry fly ash
collection, and storage and making available dry fly ash to the user agencies
outside the plant boundaries round the clock; so that it forms a continuous
process. Power plants are also expected to take necessary initiatives in the
manufacture of bricks, blocks, tiles, etc. as convenient according to the
usage anticipated either by their own efforts or by engaging private
entrepreneurs to ensure ash utilization.

The efforts made by MOEF/MOP/TIFAC (FAM)/CPCB/SPCB and

the various state agencies are appreciated. It is by virtue of their continuous
pursuance and efforts that the overall ash utilization has increased in spite of
increase in capacity addition (MW) and ash generation rate. As the
awareness increased, benefits of ash utilization were realized by the power

150
plants and it became popular and new areas were realized; the ash utilization
has increased and is expected to achieve further progress. The ash utilization
has been deliberated at various different forum and at all levels at the
Central, State Governments, Power Utilities, Thermal Power Plants and all
concerned user groups, agencies etc. All Power Utilities and Thermal Power
Plants are to plan and implement ash utilization targets, keeping in view long
term strategies on sustainable basis. The ash utilization is a priority area.

The ash utilization is required to be carried out at all the coal and
lignite based thermal power plants that are emitting ash and it needs to be
carried out by all projects that are under construction, renovation,
modernization and those at the preliminary stage of investigation and
infrastructure development within 100km radial distance and if necessary,
ash utilization may also be carried out beyond 100 km radial distance. The
important areas of ash utilization are indicated below:

i) Building Sector for use in bricks, blocks, tiles, cement,

concrete, plaster, etc.
ii) Land reclamation, filling low-lying areas, raising ground levels.
iii) Roads, embankments, ash dykes, roadblocks, kerbstones, etc.
iv) Agriculture and wasteland area development.
v) Hydro Sector, Irrigation, drains, water supply and drainage.,
lining of rivers, tributaries, canals, minors, sub-minors etc.
vi) Mine filling.
vii) Industrial applications and high value areas.
viii) Roller compacted dams, pavements, roads etc.

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 ix) Special use for ash e.g., collecting cenospheres from floating
ash.

All applications are primarily based on Research, design

demonstration and confidence building in the use of fly ash based products.
Considerable research work has been carried out A perspective plan of
Research of Development has been prepared by Advisor, Fly Ash Utilization
Program.

4.24: FLY ASH UTILIZATION INITIATIVES AT RTFS

MOEF/GOI has stipulated utilization of 100 percent Fly Ash

generated at Thermal power stations for manufacturing ash based products
like Bricks, Asbestos sheets, Embankments, Dams and Dykes. Fly Ash is
issued free of cost. The approximate quantity of Fly Ash generated at
Raichur Thermal Power Station from 7 units for the year 2996-07 is 17.50
lakhs metric tonnes. RTPS has the distinction of utilizing approx. 60 to 65
percent of Fly Ash in a year. Total coal consumed during 2006-07 74.55
lakhs tonnes. Ash content - 22.02 lakh tones. (Weighted ash content 31.73
percent). Fly ash (80 percent) 16.0 lakh tones. Bottom ash (20 percent) 4.40
lakh tones. Fly ash utilization (65 percent) 10.37 lakh tones. Fly ash
disposal is a major environmental concern in Thermal power stations.
KPCL have taken several steps to promote flly ash utilization and achieving
100 percent as per MOEF notification. The Fly Ash being issued free of
cost two SSI Units and Cement Companies. The present utilization is 35
percent to 40 percent of Ash Production. It has establishing a “Center for

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Fly Ash Utilization Technology and Environment conservation at RTPS “in
consultation with CPRI.

Agreement signed with major cement manufacturers like ACC and

ARV society for production of puzzalona cement using Flyash. The Flyash
is being transported through specially designed closed tankers by road
MOU between KPCL and major cement companies like ACC and ARV is
under finalization for transportation of fly ash by rail in closed railway
wagons to enhance the utilization. Fly ash has been issued to many SSI
units for manufacture of Flyash bricks, asbestos sheets etc. Established an
R and D centre in 2002 with Norwegian aid for the utilization of Flyash in
the manufacture of ash-based products. Associated with the university of
Agricultural Sciences, Raichur by extending financial aid for carrying out
R and D on utilization of Fly ash in the agricultural sector. Pond ash is
being used for construction of roads. Fly ash bricks utilized for construction
of houses and station building.

ASH UTILISATION AT RTPS

2006 - 2007 80.00 percent
2005-2006 65.00 percent
2004-2005 64.82 percent
2003 - 2004 56.00 percent
2002-2003 31.00 percent

The project concerning afforestation and green belt development

around the Bellary Thermal Plant has been entrusted to UAS Dharwar. The
afforestation work was planned ahead of the project commencement and of

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the entire 220 hectare landscape, close to 50 percent has already been
covered under the programme. This affirms KPCL's commitment for
protecting the surrounding environment.

4.25: ENVIRONMENT MANAGEMENT MEASURE TAKEN UP BY

KPCL

KPCL’s power generation blueprint has a clear-cut policy on

environment management. Building in green-mapping concepts such as
sustainable development, which creates the framework for improving the
quality of life. Sustainable development goes hand-in-hand with
'environment protection'. KPCL has a comprehensive action plan in place
that enables environment management, pollution monitoring and the
implementation of specific environment projects. All KPCL projects have
the assurance of a comprehensive Environmental Impact Study to evaluate
the impact of the project on the environment. It also prepares an
Environmental Management Plan complying with all the conditions
stipulated by KSPCB/MOEF. KPCL's Raichur Thermal Power Station has
►

been accredited with ISO 14001 -2004 for its efforts towards environment
protection management.

The following innovative and new measures to aid the process of

environment control have been put in place:
• A unique Ayurvedic greenhouse has been developed at Kadra Project.
• Fish fingerlings in power generation reservoirs to maintain aqua-
balance.
• Eco-friendly control measures adopted such as controlled blasting.

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 • Construction of colonies with least destruction to ecology.
• Installation of Electro Static Precipitators in Thermal Plants.
• Measures across the board to minimize pollution.
• Fuel supply agreement with collieries to ensure high grade coal
supplies.
• Monitoring measures for ash minimization, ash emission control, ash
utilization and ash disposal.
• Recycling of water from ash ponds for alternative use.
• Modernization of sewerage treatment plant.
• Continuous monitoring of air quality in work environments &
environment management measures.

First of all, it has to select the best power generation technology for
the fuel chosen to balance the environmental and economic benefits. The
choice of technology and Pollution Control Systems will be based on the site
specific environment assessment. To control the high ash production the best
practice should be followed in thermal power stations. It should choose the
cleanest fuel economically available. It requires careful disposal and
reclamation, it has to give preference to low ash, low sulfur coal, Nitrogen
Oxide (NOx) reduction is achieved by low NOx burners and dry sulfur
removal systems are preferred over wet systems. The use of re-circulating
cooling systems has to be implemented at the units. Regulatory
requirements in water quality, air quality and ash management should be
met. Overall a comprehensive monitoring and reporting system is required
and environmental auditing should be done periodically.

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4.26: PRACTICE OF MANAGEMENT

The corporation has adopted professionalism in the management

practice to meet the challenges of a competitive scenario in the power
sector. It has cost consciousness and transparency in the day to day
transactions. It is consistently maintaining time and cost element in project
execution benchmarking with the best in India and abroad. The financial
and commercial systems to ensure fair play for stakeholders like vendors,
contractors and lenders. It is focusing on importance for obtaining lawful
consents, permits and clearances in the activities. Contractors, suppliers and
other business associates are expected to comply with relevant legal
requirements for smooth running of business. Unnecessary wastages are
eliminated and savings are obtained through a professional approach inn
design, execution and operation and maintenance of power projects. It is
consistently upgrading the knowledge and skills of employees through
conducting continuous in-house training programmes. The Corporation, as a
public authority, has taken steps towards the compliance of the Right to
Information Act 2005.

The Corporation has created separate task forces to take up research

and development activities in order to optimize generation from the existing
power plants thorough improvements and also to adopt new technology for
higher efficiencies in operation and maintenance of power plants. Some
other areas where newer technologies have been adopted like Renovation
and modernization of existing power plants are contemplated on a
continuous basis.

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 The level monitoring to Talakalale Dam with GSM based technology
has been implemented for optimum usage of water resources. Condition
monitoring of generator transformers healthiness has been initiated which
will decrease the failure rate.

4.27: CORPORATE SOCIAL RESPONSIBILITY ADAPTED BY

KPCL

The corporation has donated to the Chief Minister’s Relief Fund,

social welfare and childcare programmes in the State. Maintaining aesthetic
gardens at the Kidwai Oncology Hospital, Project locations, Corporate office
and park with and attractive water fountain in front of Vidhan Soudha. It is
supporting rehabilitation and resettlement measures at various places near
the hydroelectric power projects and near RTPS. It is passing on the benefits
of cost cutting savings in construction, financial engineering and best
efficiency of operations to the consumers. It is adopting people friendly
approach including settlement through Lok Adalath. About 150 cases in Kali
Project involving about Rs.14 crores have been settled during FY 2006-07.
It is making available corporation run schools, hospitals and community
centers for the general public in the project area. It is mainlining interior
roads near project location and adhering to strict compliance to
environmental laws, regulations and norms.

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