The main argument being advanced in favour of entrusting the O&M of SDSTPS to interested companies is that its variable cost of generation is high at ?3.14 per KWH

Employees of the Andhra Pradesh (A. P.) power utilities are seething with anger at the government’s decision to hand over the Operations & Maintenance (O&M) of Sri Damodaram Sanjeevaiah Thermal Power Station (SDSTPS), at Krishnapatnam in Nellore district, to private companies for which the Cabinet has given its nod last month. The unrest among them has since grown due to reports that bids are going to be invited soon.

The main argument being advanced in favour of entrusting the O&M of SDSTPS to interested companies for 25 years is that its variable cost of generation is high at ?3.14 per kilowatt-hour (kWh) compared to private generators like the nearby Sembcorp Gayatri Power Limited (SGPL)‘s ?2.14 per KWH.

Andhra Pradesh State Power Employees’ Joint Action Committee (APSPE-JAC), which is already at loggerheads with the government over various issues, insist on that the cost factor is only an excuse to give away SDSTPS to private players on a platter.

JAC convener B. Sai Krishna told The Hindu that instead of trying to privatise SDSTPS, the government could operate it at a Plant Load Factor (PLF) of more than 85%, by ensuring timely supply of coal and taking other measures that would improve efficiencies.He pointed out that the man-to-megawatt ratio of SDSTPS (0.2) was far below the global standards and contended that, if the overall picture is taken into account, the SDSTPS is a less expensive project compared to SGPL.

“During the FY 2020-21, the total cost of SDSTPS stood at ?4.64 (fixed cost ?1.50 + variable ?3.14) per kWh at 85% PLF. The SGPL’s cost is ?4.74 (fixed cost ?2.23 + variable ?2.51) per kWh.The government has apparently made some unfair comparisons in reaching the conclusion that AP-Genco should distance itself from O&M at SDSTPS. The JAC would not let the government go ahead with its plan as it was bound to have far-reaching consequences for the power sector,” Mr. Sai Krishna asserted.

It is pertinent to mention that the government had constituted an expert committee led by SPDCL former CMD P. Gopala Reddy in 2019 to work out a strategy for improving the efficiency of thermal plants amidst reports that the NTPC contemplated to take over the Rayalaseema Thermal Power Plant (RTPP) and even held discussions with top officials of the Energy Department. Energy Minister Balineni Srinivasa Reddy had subsequently clarified that RTPP would remain as a PSU.