Ad Here  
Bhubaneswar IIT cries for completion Global Investors Meet Post Poned MOUs worth Rs.10.54 lakh crore signed ODISHA Mango Diplomacy It indeed is attractive for investments Inter-State boundary Enticing pest traps All these happened in TN… Enchanting and enterprising Tamil Nadu KTR releases Annual Report Technology has raised the bar... A neta at it again! Power for all Leaky old lorries, mini cabs for techies... Bifurcation yet to end water wars With agriculture at its heart... State Forward Competing for good: Tale of two states Infrastructure to the FORE Illegal mining of sand Nod to cow slaughter bill When business flocks to MP... Of development and welfare Municipal Elections Vedanta to close Lanjigarh refinery Industrial corridors to boost economy Pioneering education model Land acquisition policy is ahead of national policy... Development depends on land availability... CII to set up tourism bureaus Homestays, a budding tourism industry It’s Karnataka chalo for Amit Shah? Benevolent businessthan... A blueprint for the future Miners asked to pay more Tasks for the new government SIPB clears big proposals Monsoon fury Info-Park, more space Infra boost to the new capital Waste disposal model More government apps Thalaivaa Bringing magic of Rajasthan alive Stirring the political cauldron Global meets galore AP in better shape KNPP with the grid A year of Telangana A giant push for millets An industrious idea Launch of ins vikrant, India’s first indigenous aircraft carrier Doubling production and tripling farmers’ income... Green crimes galore Land scams rock AP & TS Come to Tamil Nadu where the action is... States Roundup States - Odisha City of foaming lakes and fire Wouldn’t the Mahatma like clean restrooms in our cities! Lingayats get a reminder: it’s poll time KCR’s I-day bonanza ‘E’ for enterprise Promise of a productive year Strike over salary hike States - Kerala Oh, la la. MCL has a taste of judicial activism! State of the States Reducing carbon footprint... State under siege Winds of change... TN to suffer serious loss Flurry of collaborations inked by AP Deputy Collector Sindhu! Kochi Metro Rail Project TN to suffer serious loss Fanciful Rao and tech-savvy Naidu Time to wake up TN can leverage NLC’s strengths... Divide & Prosper Why the Congress won in Karnataka Bus services hit Hype on Hyperloop
TN can leverage NLC’s strengths...
Over the past few weeks, there has been massive resistance to the proposal of the Union Government to divest 5 per cent of the shares of the Central PSU, the Neyveli Lignite Corporation Ltd.

Political parties, particularly the Communists, along with the employees’ unions controlled by different political parties, were joined by the ruling AIADMK to oppose the move. The workers’ unions also struck work at a time when the state has been suffering a severe power shortage.

In the present divisive political climate, the Union Government is not in a position to go for big- ticket divestments. Finance Minister P Chidambaram has been content to go for the divestments funded by government owned financial institutions like LIC. In this process, the higher market value of the shares could be monetised but the basic principle of widening ownership is lost.

NLC, set up in early 1960s, was the first large integrated pithead power project based on lignite deposits. German technology through Rheinbraun was accessed along with sophisticated mining equipment through handsome soft loans through the German Development Bank, KFW at 0.75 per cent interest p.a. with repayment spread over 40 years and an initial moratorium of ten years.


NLC helped take power to all TN villages

The first two decades were marked by acute shortage of lignite caused by inadequate capacity of mining equipment. For years, output of lignite was less than 3 million tonnes against the projected 6.5 MT per annum, plunging the corporation to mounting losses. Available lignite was used for feeding the 600 MW power plant equipment supplied by USSR. These sturdy machines, liberally under-rated, proved to be a boon to Tamil Nadu, supplying copious power at low cost. The northern districts of the state, including Chennai metro, benefited immensely. The state extended irrigation facilities taking agriculture to great heights and also helped TN emerge as the first state to take electricity to all villages.


The Yegneswaran magic...

Under the dynamic leadership of S Yegneswaran, supported by the then Union Minister of Steel and Mines Mohan Kumaramangalam, NLC’s mining capacity was substantially expanded in the 1970s. NLC pushed behind years of losses. Over the last three decades and more, NLC has been among the most profitable of Public Sector Undertakings.

The state government, under the Dravidian parties, has not been effectively leveraging the strengths of NLC. The expertise and resources available could have been utilised to build large capacity power plants in other parts of the state in quick succession. Many major expansion schemes of NLC did not take off. The most notable one was the large project at Jayamkondan. NTPC, established in the mid 1970s, received all attention and spread its activities all over the country and today accounts for an installed capacity of 41,184 MW, more than sixteen times the capacity of NLC. Alert mining ministers from the north are today working on tapping the resources of NLC for large projects in UP and elsewhere.

Sadly the state, instead of working on similar lines, has been dissipating its energies in relatively non-issues like the five per cent divestment, which can have little impact either on management or control. The state, whose finances are not in great shape, can certainly work on much larger and more valuable issues than on this tiny piece of divestment.

Author :
Reported On :
Sector :
Shoulder :
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
S-15, Industrial Estate,
Chennai - 600 032.
PHONE: +91 44 22501236