PSU Power, Coal Cos’ capex outlay at ₹68,000 crore in FY21

Kolkata: Eleven state-owned power and coal companies will increase their capital expenditure (capex) by 7.2% to ₹68,435 crore in 2020-21, according to targets set by the Centre.

NTPC, Power Grid Corporation (PGCIL) and Coal India (CIL) are expected to account for 60% of the expenditure.

For the current year, the Centre has recently revised budgeted capex of five companies, increasing total capex by 12% to ₹71,313 crore.

CIL and Damodar Valley Corporation (DVC) saw their capex reduced, while it was increased for Rural Electrification Corporation (REC), National Hydro Electric Power Corporation (NHPC), Tehri Hydro Development Corporation (THDC) and North Eastern Electric Power Corporation (NEEPCO).

“Coal India was expected to acquire foreign assets during the current fiscal and order larger mining equipment to enhance productivity. However, foreign acquisition has been delayed due to its inability to find a suitable merchant banker since coal is increasingly being considered a dirty fuel,” a senior Coal India executive said. “Its initiative to procure large mining equipment, although, has been started, deliveries and payments are expected to be made next year and hence the entire existing budgeted capex may not be necessary.”

Its capex, fixed at₹10,000 crore beginning of the year, was recently reduced by ₹2,000 crore for the year. Next year, the company is to invest around ₹9,500 crore, which will be used for procuring wagons and equipment, acquiring land and take up new project and expand existing ones.


REC is scheduled to be merged with Power Finance Corporation and the Centre has recently set a capex of ₹8,500 crore for it. According to recent reports, the Centre will offer distribution companies loan at cheaper rates — close to cost of funds — and state-run lenders including REC would be offering the loan. It will help financially stressed discoms settle some of their outstanding to the power generators. The plan is to settle dues to renewable power generators first.

Next year, NTPC will invest ₹21,000 crore — the highest among all PSUs in the segment. Bulk of this would go into taking up thermal and solar projects in the pipeline, setting up four waste to energy plants and for retrofitting pollution control equipment at its existing plants. Power Grid Corporation is scheduled to undertake a capex of ₹10,500 crore next year (₹15,000 crore in FY20), as part of a five-year plan to invest close to ₹1 lakh crore in setting up transmission corridors and strengthening existing grids.