Company Analysis Bbmb 405471

ENERGY SECTOR STRUCTURE, POLICIES & REGULATIONS GROUP ASSIGNMENT COMPANY ANALYSIS (BHAKRA BEAS MANAGEMENT BOARD)

Submitted by: Group # 4

Roll No. 02, 14, 29, 36

Submitted to: Mr. Anupam Sircar

Date: 2-11-2010

COMPANY OVERVIEW

Developmental History of Bhakra – Nangal Dam Project

Bhakra Nangal Project is something tremendous, something stupendous, something which shakes you up when you see it. Bhakra, the new temple of resurgent India, is the symbol of India’s progress. -Jawaharlal Nehru

Brief History The proposal to construct a storage reservoir on the satluj first time originated in a note dated 8 November 1908 by Sir Louis Dane indicating Suni and Badu Gorges as being favourable sites for dams for storage and power development. A detailed report on this proposal was submitted in March 1910. However, the estimated cost of the project was considered prohibitive and project was shelved. 1919 Project Report The proposal for a dam on the satluj was again revived by Mr. F.E. Gwyther, the then Chief Engineer, in a note dated 20 February 1915. On the basis of this note, the first detailed and comprehensive project report for a high dam at Bhakra was prepared in 1919. The 1919 project report provided for the storage of the unutilized satluj water during the period of excess flow and essentially consisted of the following four big works:

• • • •

Bhakra Dam Upper Sirhind Canal Lower Sirhind Canal The Western Yamuna Canal Extension.

The proposed dam was to be 120.40m (395 ft) high located about 69 km (43 miles) from Ropar almost at the same place as where the present dam has been constructed. It provided for a maximum storage of 3182.38 million m3 (2.58 million-acre ft). The dam was to have a solid masonry gravity section arched in plan and was to be the highest dam in the world at that time. The project did not provide for any hydroelectric installation and was essentially an irrigation project. The project was fully ed by geological investigations carried out by the Geological Survey of India. The 1919 project, however, never materialised and was shelved in favour of the satluj Valley Project sanctioned in 1919. Final Proposal of the Project during 1948-51 In 1948 when irrigation & power demands of the partitioned state of Punjab on the Indian side further increased, the question of the height of the dam, the top elevation which was fixed at El. 487.68 m (1,600 ft) only to prevent the submergence of Bilaspur town, was reviewed and it was decided to construct the dam to the maximum safe optimum height as determined by foundation rock conditions, so as to fully exploit irrigation and power potential. In 1951, a revised project report was prepared for the 207.26 m (680 ft) high, straight gravity dam. The final project proposal comprised the following units: • • • • • • • • • •

Bhakra Dam and Power Plants Nangal Dam Nangal Hydel Channel Ganguwal & Kotla Power Houses on the Nangal Hydel Channe Remodelling of Ropar Headworks Remodelling of Sirhind Canal Bhakra Canals Bist Doab Canal Transmission and distribution system of electrical energy Development of markets and communications of Bhakra area

Thus, with the above proposal, Bhakra Nangal Project took the shape of a true multipurpose project, providing irrigation and power generation as its main benefits and facilities for flood prevention, recreation and fish culture as incidental advantages.

Construction Phase of Bhakra-Nangal Project during 1951 - 1963 The working conditions at Bhakra in the early years of the Project Layout and Construction were appalling, to say the least. The rail-head was up to Ropar (Punjab) only, about 60 Km away from Nangal, the construction of further extension up to Nangal started in 1946. Pt.Nehru was immensely proud and fond of Bhakra. He visited the project 10 times during its construction. Fired by ion and enthusiasm to build new India, all engineers and technicians put in un-tiring efforts day & night for almost a decade to build Bhakra Dam – the Nation’s Pride. Pt. Nehru dedicated the dam to the nation on 22nd October 1963. Beas Project The Beas Project, comprising two units namely, Unit-I – BSL Project and Unit-II – Beas Dam, is a part of the Master plan for the utilisation of the waters of the three eastern rivers viz. the Satluj, the Beas and the Ravi for irrigation and power-generation in an integrated manner. With the completion of Bhakra-Nangal Project, the waters of the Satluj (average flow 16,652 million cum or 13.5 million-acre feet) were fully harnessed. With the help of the existing Madhopur-Beas link which transfers, on an average, 2344 million cu m (0.9 million acre feet) of Ravi waters to the Beas, the Beas dam at Pong together with the Bhakra Dam enables India to harness about 92% of the average inflow of the three eastern rivers. With the completion of Beas-Satluj Link project, the figure has further risen to 97%.

KEY BUSINESS AREA Water is essential for sustenance of all forms of life on earth. It is not evenly distributed all over the world and even its availability at the same locations is not uniform over the year. While the parts of the world, which are scarce in water, are prone to drought, other parts of the world, which are abundant in water, face a challenging job of optimally managing the available water resources. No doubt the rivers are a great gift of nature and have been playing a significant role in evolution of various civilizations, nonetheless on many occasions, rivers, at the time of floods, have been playing havoc with the life and property of the people. Management of river waters has been, therefore, one of the most prime issues under consideration. Optimal management of river water resources demands that specific plans should be evolved for various river basins which are found to be technically feasible and economically viable after carrying out extensive surveys. Since the advent of civilization, man has been constructing dams and reservoirs for storing surplus river waters available during wet periods and for utilization of the same during lean periods. The dams and reservoirs world over have been playing dual role of harnessing the river waters for accelerating socio-economic growth and mitigating the miseries of a large population of the world suffering from the vagaries of floods and droughts. Dams and reservoirs contribute significantly in fulfilling the following basic human needs: -

• • • • • •

WATER FOR DRINKING AND INDUSTRIAL USE IRRIGATION FLOOD CONTROL HYDRO POWER GENERATION INLAND NAVIGATION RECREATION

FUTURE PLANS The future plans for BBMB are concentrated on renovation, modernization and uprating Bhakra power house an addition of 90 MW is underway as Machines of Bhakra (Left) Power House are being renovated from present capacity of 108 MW to 126 MW. Capacity of this power house shall be increased from 540 MW (5x108 MW) at present to 630 MW (5x126 MW). Contract for Renovation, Modernization & Uprating has been awarded to consortium of M/s Sumitomo-Japan, Hitachi-Japan & Andritz-Austria, at an approximate cost of 490 crores. RM&U of five machines is being executed in a phased manner & is expected to be completed by March, 2013.

SWOT ANALYSIS

STRENGTHS Bhakra Beas Management Board was constituted in 1966 named as Bhakra Management Board and then it underwent changes and later in 1976 was renamed as Bhakra Beas Management Board. During all these years the company has overcome many issues and challenges and has built itself as a strong units. Today BBMB has got a total installed capacity of 2804.73 MW which is the largest base of Hydro Power in India with a high PLF. Project Bhakra Left Bank Power House Bhakra Right Bank Power House Ganguwal Power House Kotla Power House

Generation Capacity (MW) 540 785 76.39 77.34

Dehar Power House Pong Power House

990 396

BBMB’s strength also lies in the fact that they maintains the largest reservoirs in the country such as Bhakra and Pong Dams and they also operate long Hydro tunnels and Hydel channels. Name Pandoh-Baggi Tunnel Sundernagar Satluj Tunnel Sundernagar Hydel Channel Nangal Hydel Channel

Length(KM) 13.1 12.35 11.8 64.5

Diameter(M) 7.62 8.53 -

Capacity(Cumec) 254.85 403.52 254.85 354

One of the other strengths of BBMB is in its network of transmission lines which is widest in the country . S.No. 1. 2. 3. 4.

Voltage Level 400 KV 220 KV 132 KV 66 KV Total

Number of Sub Stations 3 17 2 2 24

Line Length (CKT. KMS) 573.95 2993.54 21.72 115.50 3704.04

Apart from the technical aspect BBMB has got the advantage of its Human Power. They have got about 11,500 employees, out of which 5000 are highly skilled employees in their professions. They have got a work force of highly skilled graduates and post graduates who are involved in operation & maintenance of 6 hydro powerhouses, reservoirs and water conductor systems etc. BBMB has also invested a lot in their employees welfare such as maintaining its own hospitals and schools at the project sites for their employees and their families which in turn ads to their strength. WEAKNESS Apart from its strengths BBMB has also got certain weaknesses also. Running and managing a multipurpose hydroelectric project is not a easy task and brings along some problems and issues along with it. In order to setup such hydroelectric projects rivers are to be diverted which is not an easy task to do and if the things are not planned properly it may result into a potential weakness for the company. One of the main weakness for the company is that they have to face with the problems related to huge displacement of people which is not always a easy task to do and if people are not ready to give away their lands then it becomes a hurdle for the project and also leads to financial losses. One of the major weakness of the company is that it has to rely on monsoon for its power generation. In 2009-10 the company’s performance went down because of a draught like situation that prevailed whole year. During

that year the total electricity generation was just 9,494 million unit as compared to 11,171 units produced by them during the previous year. OPPORTUNITIES There are large numbers of opportunities which BBMB can explore more and more upon. BBMB deals in multipurpose hydroelectric project which scores over dedicated generation projects on several fronts. It helps in generating low cost green energy as well as helps in water management for the purposes like irrigation, drinking etc. Apart from electricity generation BBMB also has the opportunity in areas like irrigation, providing drinking water facilities, fisheries etc. The other major and big opportunity which the company has is that most Indian cities faces huge shortage of drinking water and such projects are helpful in controlled and channelized release of water through downstream canals which in turn helps in reducing drinking water shortage. Today India is facing a energy shortage situation with peak energy shortage of around 11,286 MW which is about 10% short of the demand. In such a scenario the company can use the opportunity and increase its capacity and efficiency and try to capture more and more market. THREATS One of the major threats being faced by a hydro electric company is that there is a lot of focus being laid on environmental issues and building and hydro project have become that much more difficult to setup. Apart from this if we see then the current installed capacity of hydro is 36913.40 MW and the total potential of hydro in India is 84000 MW . Therefore we are left with almost 50% of the capacity only. Though this 50% constitutes to a major chunk but still it will decrease day by day and when the potential is reached then it will be a threat to the company as it will be difficult to expand further thereof . Not only this but BBMB also faces a serious threat from other sectors or constituents of energy mix in India such as renewable( solar, wind, etc) and also Nuclear. In a situation where environment has become a key issue government has been seeing renewable and nuclear as the major contributor which in turn increases the threat level for the company to a greater extent. Therefore even though there are major strengths and advantages for the company but the limited threats do neutralise the strength of the company up to some extent. FINANCE: Budget Figures for the Year 2008-2009 to 2009-2010, BBMB, Chandigarh.

Expdtr. upto Final Budget Expdtr. upto Final Budget September For 2008-2009 March 2009 For 2009-2010 2009 Gross Figures in lakhs of rupees Expenditure Irrigation Wing 26335.47 24800.40 Power Wing 29634.37 23791.78 Total 55969.84 48592.18 Net Expenditure Debitable to IRR. 12393.74 11668.81 To be shared by the Partner states Debitable to Power to be shared 43576.10 36923.37 by the partner state EBs Total 55969.84 48592.18

30711.05 39297.50 70008.55

14106.29 11995.03 26101.32

14745.70

6555.18

55262.86

19546.14

70008.56

26101.32

OUTSTANDING DUES POSITION (30/09/2010)

Punjab Govt. Haryana Govt. Rajasthan Govt. TOTAL

(Rs.In Lakhs) (+)4110.12 (-)1088.02 (+)272.11 (+) 3294.21

P.S.E.B. H.V.P.N.L. R.R.V.P.N.L.

Grand Total

(Rs.In Lakhs) (+) 1029.42 (+)1436.12 (+) 739.19 (+) 3204.73 6498.94

Outstanding dues on of S.O.P., POOLED LOSSSES, WHEELING CHARGES etc. 1. RRVPNL 3771.54 2. HPSEB 44.15 3. UT CHANDIGARH 19879.64 4. J & K 1489.06 5. DPSCL 51.13 6. UPPCL -2.71 7. NFL 1.00 8. Others 161.25 TOTAL

25395.06

DUES IN RESPECT OF IRRIGATION WING (WATER CHARGES as on dated 28.02.07) DWSU NIL DESU 189.06

FURTHER UPDATES ON BBMB (past year achievement) Clean – Development – Mechanism (CDM)

The Green House Gases (G.H.G) namely Carbon Dioxide, Methane, Nitrous Oxide, Hydro Fluoro Carbons, Perfluorocarbons, Sulphurhexafluoride are leading to climate changes and global warming. Efforts are being made to reduce the emission of these Green House Gases. UNFCCC (United Nation’s Framework Convention on Climate Change) has adopted under Kyoto Protocol signed in Feb.2005 by 140 Nations, an international agreement that sets emission reduction targets (5.4% reduction of emission of G.H.G. from their 1990 levels during the 1st commitment period of 2008-12). CDM is one of the methods adopted by the nations of the world for making their emission related commitments. The CDM Project actively generates tradable carbon credits or CERs (Certified Emission Reductions) which can be traded internationally in analogy like share in stock market. BBMB also qualifies to meet the CDM Project criteria, namely:1. RM&U activities were not ‘Business as usual’ feature where BBMB had to stay in busines but were additional. 2. Environmentally the project activity leads to lesser generation of fossil fuel based electricity which would have contributed to additional GHG emission. 3. Also the CDM project is a voluntary participation by BBMB. 4. CDM project contributes to sustainable development of the region. It is projected that by the end of year 2013, RM&U capacity addition of 90.00MW will be completed and a revenue of approximate 13 crore will be generated from the sale of 2,40,000 CERs up to December 2013.. CDM Project for sale of Certified Emission Reductions (CERs) generated by Renovation, Modernization and Uprating program of BBMB for its Hydro Power stations with World Bank has been undertaken by BBMB. Host Country approval has been accorded by Ministry of Environment & Forests (MoE&F). An Emission Reduction Purchase Agreement (ERPA) with World Bank has been signed by BBMB for the sale of 2,40,000 CERs @ Euro 9/CER upto Dec. 2013. Registration for the sale of CERs is awaited from UNFCCC. Process for g of second ERPA for the sale of 5,65,000 CERs starting from 31st Dec. 2013 has been initiated. HR Excellence Award BBMB under the able guidance of its Chairman Sh. A.B. Agrawal, has won the Corporate Greentech HR Excellence Gold Award-2010 in Training Excellence Category and Best Strategy Category. The innovative practices and rich HR experience of the Chairman helped BBMB represented through its HR team of Er. G.S. Wason, Director/HRD and Er. B.S. Sabharwal, t Secretary/HRD, Board Secretariat, Chandigarh, win the award. An Award Distribution Function was held in Goa during the conference on “Sustainable Practices in HR” from 17-18.09.2010. Enertia Awards 2010

The BBMB Team was selected from amongst 103 participating teams in all from various PSUs, Private Sector Companies and Govt. of India Enterprises, in each of the four Corporate Award Categories and Individual Award Categories. Greentech Foundation Awards have become most ired and top honour in the Corporate World. This National award has been given in recognition of BBMB's consistent and excellent operational performance of India's largest multipurpose Hydro Power Projects. In the last three years, BBMB's generation continuously exceeded the targets fixed by Central Electricity Authority (CEA). BBMB projects generated 9494 MUs of Electricity in 2009-10 against target of 9110 MUs inspite of poor monsoon. It is worth mentioning that BBMB achieved highest ever generation i.e. 1575.5 MUs in the month of September, 2010 since its inception.

REFERENCES: 1. Financial Express- Interview of chairman Mr. A.B. Agrawal of BBMB 2. http://bbmb.gov.in 3. http://bhakra.nic.in

4. Financial Journal