INTERNSHIP TRAINING REPORT

A study conducted at

NATIONAL THERMAL POWER CORPORATION

UNCHAHAR

Submitted to Bangalore University

In partial fulfillment of the requirement of the degree of

MASTER OF BUSINESS ADMINISTRATION

By

(Rahul kumar singh)

Reg No. 06CQCM6068

Under the guidance of

Dr. Kalyani Rangarajan

Professor &HOD

DSCMIT

Dayananda Sagar College of Management & Information TechnologyShavige Malleshwara Hills, Kumara swami layout

Bangalore – 560078.

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Dayananda Sagar College of Management & Information

Technology, Bangalore – 78

August - 2007

Certificate

This is to certify that internship training report has been submitted in the partial fulfillment for the award of degree of

MASTER OF BUSINESS ADMINISTRATION

To

Bangalore University

By

Rahul kumar singh

Under the guidance of

Dr. Kalyani Rangarajan

Professor &HOD, DSCMIT

Dr. Kalyani Rangarajan Dr. T RangarajanHead of department, MBA Director, MBA

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STUDENT DECLARATION

I hereby declare that the “Internship Training Report” submitted in partial

fulfillment of the requirement of degree of Master Administration to

Bangalore University Under the guidance and supervision of Dr. Kalyani

Rangarajan professor & HOD, DSCMIT is my original work and not

submitted for the award of any other Degree, Diploma, Fellowship or other

similar title.

Place: Bangalore Rahul kumar singh

Date: REG. NO. O6CQCM6068

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FACULTY CERTIFICATE

This is to certify that the “Internship Training Report” at National Thermal

Power Corporation Unchahar, is completed under my guidance and

supervision. It is submitted in partial fulfillment of the requirement of degree

of Master Administration to Bangalore University by Rahul kumar singh.

And this has not formed a basis for the award of any other Degree, Diploma

and Fellowship by any other institute or university.

Place: Bangalore Dr. Kalyani Rangarajan

Date: Professor & HOD,

DSCMIT

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ACKNOWLEDGEMENT

First of all I pay my respect to the Chairman of Dayananda Sagar college of

Management & Information Technology for offering this management

studies facilities, which is not only benefiting us but also creating further

opportunities for management studies in the country.

I take this opportunity to thank Dr. T Rangarajan- Director, DSCMIT for

his unflagging support, guidance and direction.

I express my sincere gratitude to Dr. Kalyani Rangarajan, Head of

Department MBA, DSCMIT, whose profound intellectual guidance,

support and encouragement has acted as an inspiration in my endeavor. And

under whose guidance, I have learned, relearned and unlearned views, ideas,

values and knowledge and completed this internship training successfully.

Finally, I would like to thank Mr. T. Mukherjee (Deputy General

Manager), and Mr. Bimal Shah Officer (HR-ED) and all other

organization members.

Last but not the least I would wish to acknowledge my gratitude to those

who provided me encouragement, assistance and guidance in various levels

for overall completion of this work.

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CHAPTER PARTICULARS PAGE NO I. INTRODUCTION 10

GENERAL INTRODUCTION 11

OBJECTIVE OF THE STUDY 12

INDUSTRIAL BACKGROUND 13

ORIGIN OF THE INDUSTRY

GROWTH & DEVELOPMENT OF THE INDUSTRY

PRESENT STATUS OF THE INDUSTRY

BUSINESS ENVIRONMENT

FUTURE OF INDUSTRY

II. PROFILE OF THE ORGANIZATION 32

ORIGIN AND GROWTH OF ORGANISATION

PRESENT STATUS AND FUTURE VISION

OF THE ORGANISATION

ORGANISATION CHART

SWOT ANALYSIS OF THE ORGANIZATION

III.DETAILED STUDY OF THE DEPARTMENTS 47

FUNCTIONAL DEPARTMENT

CONTRACT DEPARTMENT

PURCHASE DEPARTMENT

STORES DEPARTMENT

HUMAN RESOURCE DEPARTMENT

FINANCE DEPARTMENT

PRODUCTION DEPARTMENT

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IV. STUDY OF SPECIFIC MANAGEMENT PROBLEM 101

SPECIFIC MANAGEMENT PROBLEM

SUGGESTION

RECOMMENDATION

V. BIBILOGRAPHY 104

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LIST OF GRAPHS

GraphNumber

Matter PageNumber

1 Installed capacity and Generation 15

2 Power Generation 2006-07 16

3 Total capacity as on 31-03-07 16

4 Power Allocation 37

5 Station Generation 38

6 Station Turnover 94

7 Station Gross Margin-(Profit) 94

8 Station Profit/ Turnover (%) 95

9 Stage – I Power Generation 99

10 Stage – II Power Generation 100

11 STATION POWER LOAD FACTOR (PLF) %

100

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LIST OF TABLES

Table Number

Matter Page No.

1 An Overview of NTPC 19

2 Coal Based Power Stations 20

3Gas/Liq. Fuel Based Power Stations

21

4 Power Plants with Joint Ventures 21

5 Projects under Implementation 22

6 A Brief Profile of the Project 36

7 Activities, Responsibility and Approving Authority

49

8 Estimated value of indent 70

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CHAPTER-1

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GENERAL INTRODUCTION:

NTPC Limited is the largest thermal power generating company of India. A

public sector company incorporated in the year 1975 to accelerate power

development in the country as a wholly owned company of the Government

of India. At present, Government of India holds 89.5% of the total equity

shares of the company and the balance 10.5% is held by FIIs, Domestic

Banks, Public and others. Within a span of 30 years, NTPC has emerged as a

truly national power company, with power generating facilities in all the

major regions of the country. Based on 1998 data, carried out by Data

monitor UK, NTPC is the 6th largest in terms of thermal power generation

and the second most efficient in terms of capacity utilisation amongst the

thermal utilities in the world.

NTPC Limited is the largest thermal power generating company of India. A

public sector company incorporated in the year 1975 to accelerate power

development in the country as a wholly owned company of the Government

of India. At present, Government of India holds 89.5% of the total equity

shares of the company and the balance 10.5% is held by FIIs, Domestic

Banks, Public and others. Within a span of 30 years, NTPC has emerged as a

truly national power company, with power generating facilities in all the

major regions of the country. Based on 1998 data, carried out by Data

monitor UK, NTPC is the 6th largest in terms of thermal power generation

and the second most efficient in terms of capacity utilisation amongst the

thermal utilities in the world.

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OBJECTIVES OF THE STUDY:

1. To have an overview of the organization, Its operation, its activities its

working conditions and techniques used and applied in these all

prevailing activities, the growth and development, present status,

competition and challenges facing by the organization in the industry,

the future trends in this backdrop.

2. To understand,

The internal mechanism operation of the organization

The working of the organization’s various departments

To focus on IR ( Information Resources ) requirements of the

company

To make a detailed report and study about the specific problems

prevailing in the company, and our suggestions and conclusion

relating to that of the growth of the concern

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INDUSTRIAL BACKGROUND AND ORIGIN OF INDUSTRY:

NTPC Limited come into being on 7th November 1975, through an

amendment of India Electricity (Supply) Act, to supplement the efforts of

the Indian states for quicker & greater capacity addition with the mandate

for planning, promoting and organization an integrated development of

thermal power (including associated transmission systems) in India to

support the economy of the country. In a span of just over 23 years after

commissioned of the first 200 MW unit at Singrauli in Feb 1982, NTPC has

grown to become that largest power generation utility of India with a

commissioned capacity of 24249 MW with 23 power station geographically

spread over the length & breadth of India, covering coal and combined

cycle power plants. The company has expanded its operations in the area of

hydropower and is on the way for backward & forward integration in fuel,

power transmission & distribution. In 1997 the department of Public

Enterprises, Govt.of India granted “Navratna” status with power of

operational authority to the board of NTPC. The objective was to turn the

public sector enterprise into a global giant. This has helped NTPC in speedy

implementation of power projects, absorption of new technologies &

formation of joint ventures in the core generation as well as services

businesses. “NTPC limited” has gone in for diversification initiatives

beyond thermal power to move towards becoming an integrated power

major.

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NTPC Limited has an aggressive capacity addition programme to become a

66,000 MW company by 2017 with a thrust on hydropower targeting about

8,000 MW hydro capacities. Integrated coal mining cum power project,

induction of large size unit for future projects, new technologies etc are

some of the drives already initiate.

An Overview

a) Date of

incorporation

: November 7, 1975

b) Mode of

incorporation

: Incorporated as a Government Company under

the provisions of the Companies Act, 1956.

c) Administrative

Ministry

: Ministry of Power, Government of India

d) Details

of Disinvestments

: The Govt. of India was holding the entire paid-

up share capital of the Company till October

2004. The Govt. of India disinvested 5.25% of its

holding in the Company through Offer for Sale

along with Initial Public Offering of 5.25% of the

paid-up share capital by the Company in the year

2004-05. In the post-issue scenario, the holding

of the Government of India is reduced from

100% to 89.5% of the paid-up equity share

capital.

e) Present status : A Government Company within the meaning of

Section 617 of the Companies Act, 1956.

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f) Share Capital    

 

i) Authorized

: Rs. 100,000.00 million

  ii) Subscribed,

issued     & paid-

up

: Rs. 82,455 million

GROWTH OF NTPC INSTALLED CAPACITY &

GENERATION:

Graph-1

PRESENT STATUS:

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Graph-2

Graph-3

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GENERATION 2006-07

NTPC188.67 Bus

28.50%

ALL INDIA 662.43 BUs

TOTAL CAPICITY AS ON 31-03-2007

NTPC27,404 MW

20.18%

ALL INDIA 130,539 MW

Business of the Company

NTPC has been established to carry out the objectives specified in the

Memorandum & Articles of Association of the Company as amended from

time to time. The main activities of NTPC are setting up of power plants and

power generation through its coal-based and gas-based power plants. The

Company has also diversified into construction of hydro power plants and

generation of hydro power besides trading and distribution of electricity. The

Company is now entering into area of coal mining & coal washries and oil

exploration as well. The business portfolio of the company is as under:

i) Power Project Construction

ii) Generation of Electric Power.

iii) Coal Mining and Coal Washries.

iv) Oil Exploration.

v) Distribution, Trading of Electricity, Trading of Ash and other related

products through its wholly-owned subsidiary companies.

As on date the installed capacity of NTPC is ~25,000 MW through its 14

coal based (20,185 MW), 7 gas based (3,955 MW) and 3 Joint Venture

Projects (314 MW). NT PC acquired 50% equity of the SAIL Power Supply

Corporation Ltd. (SPSCL). This JV company operates the captive power

plants of Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74 MW).

NTPC is also managing Badarpur thermal power station (705 MW) of

Government of India. As on December 31, 2005, the installed capacity of the

company represented approximately 19.35% of India's total installed

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capacity, and contributed 27.1% of the total power generation of India

during the April - Dec 2004-05.

NTPC has set new benchmarks for the power industry both in the area of

power plant construction and operations. It is providing power at the

cheapest average tariff in the country. With its experience and expertise in

the power sector, NTPC is extending consultancy services to various

organisations in the power business.

NTPC is committed to the environment, generating power at minimal

environmental cost and preserving the ecology in the vicinity of the plants.

NTPC has undertaken massive afforestation in the vicinity of its plants.

Plantations have increased forest area and reduced barren land. The massive

afforestation by NTPC in and around its Ramagundam Power station (2100

MW) have contributed reducing the temperature in the areas by about 3°c.

NTPC has also taken proactive steps for ash utilisation. In 1991, it set up

Ash Utilisation Division to manage efficient use of the ash produced at its

coal stations. This quality of ash produced is ideal for use in cement,

concrete, cellular concrete, building material.

A "Centre for Power Efficiency and Environment Protection (CENPEEP)"

has been established in NTPC with the assistance of United States Agency

for International Development. (USAID). Cenpeep is efficiency oriented,

eco-friendly and eco-nurturing initiative - a symbol of NTPC's concern

towards environmental protection and continued commitment to sustainable

power development in India.

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As a responsible corporate citizen, NTPC is making constant efforts to

improve the socio-economic status of the people affected by the projects.

Through it's Rehabilitation and Resettlement programmes, the company

endeavors to improve the overall socio-economic status of Project Affected

Persons.

NTPC was among the first Public Sector Enterprises to enter into a

Memorandum of Understanding (MOU) with the Government in 1987-88.

NTPC has been Placed under the 'Excellent category' (the best category)

every year since the MOU system became operative.

Recognizing its excellent performance and vast potential, Government of the

India has identified NTPC as one of the jewels of Public Sector ‘Navratnas’-

a potential global giant.

AN OVERVIEW Table-1

Projects No. of Projects Commissioned

Capacity(MW)

NTPC OWNED

COAL 15 22,895

GAS/LIQ. FUEL 07   3,955

TOTAL 22 26,850

OWNED BY JVCs

Coal 3 314*

Gas/LIQ. FUEL 1 740**

GRAND TOTAL 26 27,904

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PROJECT PROFILE Table-2

Coal Based Power Stations

  Coal based State Commissioned

Capacity(MW)

1. Singrauli Uttar Pradesh 2,000

2. Korba Chattisgarh 2,100

3. Ramagundam Andhra Pradesh 2,600

4. Farakka West Bengal    1,600

5. Vindhyachal Madhya Pradesh 3,260

6. Rihand Uttar Pradesh    2,000

7. Kahalgaon Bihar 1,340

8. NTCPP Uttar Pradesh 840

9. Talcher Kaniha Orissa  3,000

10. Unchahar Uttar Pradesh 1,050

11. Talcher Thermal Orissa 460

12. Simhadri Andhra Pradesh 1,000

13. Tanda Uttar Pradesh 440

14. Badarpur Delhi 705

15. Sipat Chattisgarh 500

Total (Coal) 22,895

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Gas/Liq. Fuel Based Power Stations

Table-3

  Gas based State Commissioned

Capacity(MW)

16. Anta Rajasthan 413

17. Auraiya Uttar Pradesh 652

18. Kawas Gujarat 645

19. Dadri Uttar Pradesh 817

20. Jhanor-Gandhar Gujarat 648

21. Rajiv Gandhi

CCPP Kayamkulam

Kerala 350

22. Faridabad Haryana 430

Total (Gas) 3,955

Power Plants with Joint Ventures Table-4

 Coal

Based State Fuel

Commissioned Capacity

(MW)

23. Durgapur West Bengal Coal 120

24. Rourkela Orissa Coal 120

25. Bhilai Chhattisgarh Coal 74

26. RGPPL  Maharastra Naptha/LNG 740

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Total(JV) 1054

Grand Total (Coal + Gas + JV) 27,904

Projects under Implementation

Table-5

  Coal / Hydro State Fuel

Additional Capacity Under Implementation

(MW)

1. Kahalgaon

Stage II (Phase I) (Phase II)

Bihar Coal500500

2. Sipat (Stage I)

(Stage II)Chhattisgarh Coal

1980500

3. Barh Bihar Coal 1980

4.

Bhilai (Exp. Power

Project-JV with SAIL)

Chhattisgarh Coal 500

5. Korba

(Stage III)Chhattisgarh Coal 500

6. Farakka

(Stage III)West Bengal Coal 500

7. NCTPP

(Stage II)Uttar

PradeshCoal 980

8. Simhadri (Stage II)

Andhra Pradesh

Coal 1000

9. Koldam (HEPP)

Himachal Pradesh

Hydro 800

10. Loharinag Pala

(HEPP)Uttarakhand Hydro 600

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11. Tapovan

Vishnugad (HEPP)

Uttarakhand Hydro 520

Total (Coal + Hydro) 10,860

MAJOR HIGHLIGHTS OF NTPC IN 2005-06

(Unaudited financial figures; as per press release dt 20.04.06)

The Company takes a new name ‘NTPC Limited’ aligned to its new

business plans.

The company’s market capitalisation crosses Rs. One trillion (Rs. 1,

00,000 crore) and is one of the top three largest Indian companies in terms of

market cap.

A highest ever generation of 170.88 BUs during 2005-06 registering an

increase of 7.40% over the generation of 159.11 BUs during 2004-05.

With 19.51% [including capacities of Joint Ventures Companies] share

of the total installed capacity of the nation, NTPC contributed 27.68 %

electricity generated in the country during 2005-06.

Coal Stations of NTPC achieved an operating availability of 89.91%.

Coal stations of NTPC recorded a PLF of 87.54 %, which is the highest

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for any financial year since inception. The PLF during previous year was

87.51%.

100% realization for the third year in succession.

Provisional and unaudited net sales of Rs. 259,928 million during the

year 2005-06 as against Rs. 225,316 million for the year 2004-05. However,

provisional and unaudited Gross Revenue is Rs. 286,473 million during

2005-06 as against Rs. 255,460 million for the year 2004-05.

Provisional and unaudited Net profit after tax for the year 2005-06 is Rs.

57,061 million as compared to Rs.58,070 million during the year 2004-05.

Total capacity added during the four years of Xth Plan period (2002-

2006) increases to 4000 MW with another 500 MW getting added during

the year 2005-06 taking the total capacity of the company to 24,249 MW

(including capacities of Joint Venture Companies).

Construction works on 9470 MW in progress.

Further projects with capacity of 3720 MW under bidding process

Ratnagiri Gas and Power Supply Pvt Ltd formed with NTPC having a stake

of 28.33% for taking over and operating the Dabhol Power Project.

The Government allots 7 more coal mining blocks to NTPC for captive

use taking the total mines allotted to 8 with an expected output of 50 MT per

annum.

A consortium comprising of NTPC and two other members allotted an

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oil exploration block in Arunachal Pradesh

Capital expenditure incurred in 2005-06 on capital schemes was Rs.

71,879 million compared to Rs. 53,603 million in 2004-05

Capital Outlay for 2006-07 set at Rs. 113,250 million

A USD 1 Bn Medium Term Note program established. NTPC becomes

the first Indian Corporate since 1997 to make a successful offering of 10

year Fixed Rate Note amounting to USD 300 million

Standard & Poor’s have revised outlook on the rating of the company

from stable to positive while affirming the ‘BB+’ issuer rating.

An interim dividend of 20% for the financial year 2005-06 amounting to

Rs. 16, 491 million.

Government has assigned NTPC the consultant role to modernize and

improve several plants across the country in the ‘Partnership In

Excellence’ program of the government

Partnering the government in the Rajiv Gandhi Grameen Vidyutikaran

Yojana.

NTPC has also taken up Distribution Generation for rural electrification

of remote villages through non-conventional energy sources.

Simhadri project receives International Project Management award

instituted by International Project Management Association [IPMA]. NTPC

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is the only Asian Company that has received this award.

Ranked 3rd “Great Place to work for in India” by M/s Grow Talent and

Business World 2005.

NTPC has achieved all the targets to be rated “Excellent” during 2005 -

06 for the nineteenth consecutive year since inception of the MOU system.

GROSS REVENUE AND PROFIT

Provisional and unaudited net sales of Rs. 259,928 million during the year

2005-06 as against Rs. 225,316 million for the year 2004-05. However,

Provisional and unaudited Gross Revenue is Rs. 286,473 million during

2005-06 as against Rs. 255,460 million for the year 2004-05. Provisional

and unaudited Net profit after tax for the year 2005-06 is Rs.57, 061 million

as compared to Rs. 58,070 million during the year 2004-05.

BUSINESS ENVIRONMENT:

Organizational Culture

NTPC has successfully transformed the working culture of employees who

were under electricity boards to adopt a culture of Quality, Safety and Eco-

friendly generation and providing healthy and stimulating environment after

takeover.

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ISO certification for Quality system, Environment management, Occupation

Health and Safety, health services, work place management and social

accountability are some of the milestones achieved during our journey on the

TQM front towards achieving overall goal of excellence in business.

Technology, Equipment & Facilities

NTPC operation & maintenance systems including planning and monitoring

activities equipped with proven and latest technology equipments supported

by a strong team of corporate R&D, OS and CENPEEP are the main features

which have contributed to the turn around of Unchahar. To support its in-

house maintenance function many facilities have been developed like

electrical and C&I labs, Electrical and mechanical workshops where the

repairing and maintenance of plant equipments are carried out with quality.

For comprehensive maintenance and operation skills many executive have

been tried at CEGB, UK and at our Simulator training centre at Korba.

Organization Structure & Leadership

NTPC’s current three-tier structure comprises corporate center (CC),

Regional Headquarters and Stations/ Projects. Unchahar is one of the

stations and comes under Northern Reason. NTPC is a large organization

formulation of all major policies and strategies are done at CC level so as to

uniformly manage and integrate operation all across the organization. CC

has a systematic approach to consultation and feedback with all RHQ’s and

stations/units. The GM is fully accountable for all business operations of the

power station. Operational freedom is available to HOD’s sectional heads to

take appropriate decisions on conduct of their routine work and function

DSCMIT 27

specific initiatives. The delegation of powers further strengthens the

organizational management system. Planning, review and assessment is

facilitated at difference levels.

Regulatory/Statutory Environment

All the activities and business conducted at Unchahar complies with statutes

and law of the land. Applicable laws are part of ISO 9001:2000, ISO

14001:2004, OHSAS 18001:1999 and SA 8000:2001 systems. The

compliances are not limited to those specified by the law but are even

exceeding the requirement in consonance with the NTPC corporate

philosophy and good Engineering Practices. NTPC has always kept valid

clearances, licenses with respect to the applicable statutory and legal

requirements. Comprehensive rehabilitation action plan derived from the

R&R policy of the government of India was developed at Unchahar with the

state and the project affected villages with overall development of these

villages as focus areas. DMP of Unchahar has been revised periodically and

the safety drills are being conducted regularly.

Relationships with Suppliers

Coal, water, fuel oil and spares are the most critical inputs for the power

plants. NTPC have the systems, structures and processes to manage value

creating long term relationship with IOC, CCL, BCCL, and BHEL. Vender

development is an on going process. They work with partnership spirit with

their venders, suppliers and service providers and take their feed back for

self-improvement. They work closely with BHEL keeping in mind their

focus on issues of technology, safety and environment. NTPC’s IT system

DSCMIT 28

and various tools help them to manage their materials, hospitals, contracts,

finance, and HR and O&M activities. E-procurement is a new initiative for

faster and wider coverage for procurement

Business Challenges

Despite significant reforms since 1991-92, the power sector in India is

ridden with a host of problems, and hence reform is a key priority area,

given the sector’s impact on country’s economics. The poor financial health

of SEBs (customer and competitors as well) has been a dragging force

disabling power sector to evolve and mature. Absence of fully integrated

national power grid is another major constraint for the power sector, and

does not offer optimized opportunities to better performing power plants.

The recently pronounced Electricity Act 2003 is a good government

intervention but still a lot is desired.

NTPC has been working very closely with various constituents of the power

sector, e.g. MOP, MOF, CEA, SEBs, Regulators, etc, to rejuvenate the

health and maturity of power sector in India. Unchahar has been involved in

several initiatives of NTPC for the betterment of power sector and the better

relationship with the stakeholders.

NTPC has well established systems for performance review and

improvement ,which is implemented and deployed at Unchahar .There are

two fountainhead systems that set, drive, measure and improve performance

at corporate level, regional level, station level, department level and

individual level: (1) MOU, and (2) recently introduced PMS. Organizational

improvement studies are carried out from time to time through partnership

with renowned consultants like Dr.Athreya, IIM, AT Kearney, etc. to carry

DSCMIT 29

out strategic improvements. For last 2 years the whole organization is

involved in Organizational Transformation (project “DISHA”) in association

with AT Kearney. CII’s Business Excellence model is being used since

2003. Perception measures of stakeholders and measurement of internal

performance metrics and process results are taken in to consideration to

improve policy, strategy, systems and processes. Process orientation has

been further reinforced by having ISO systems for quality, environment and

safety. Since long we have been following a system of structured

forums-e.g. , ORT, SMC, RMC, MC, etc.- for review, planning and

improvement. Total quality movement has accelerated the journey of

improvement. People’s involvement in improvement programmes is

refelected by their participation in PC, QC, Suggestion schemes,

Departmental council Meetings, POGs, 5S implementation, etc.

Benchmarking, six sigma, Kaizen, Balanced Score Card are being utilized to

bring in business improvements. People from all cadre and functions are

committed to building Unchahar as an excellent organization and role model

among NTPC stations.

FUTURE OF INDUSTRY:

A world class integrated power major,

powering India’s growth,

with increasing global presence.

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NTPC Mission

“DEVELOP AND PROVIDE RELIABLE POWER, RELATED

PRODUCTS AND SERVICES AT COMPETITIVE PRICES,

INTEGRATING MULTIPLE ENERGY SOURCES WITH INNOVATIVE

AND ECO - FRIENDLY TECHNOLOGIES AND CONTRIBUTE TO

SOCIETY”

Make available reliable and quality power in increasingly large quantities

at competitive price and ensure timely realization of revenues.

Adopt a broad based capacity portfolio including hydropower, LNG,

nuclear power, and non- conventional & eco-friendly fuels.

Plan and speedily implement power projects using state-of-the-art

technologies.

Be an integrated utility by implementing strategic diversification in areas

such as power trading, distribution, transmission, coal mining, coal

beneficiation etc.

Develop a strong portfolio of profitable businesses in overseas markets

including technical services, generation assets etc.

Continuously attract and develop competent and committed human

resources to match world standards.

Lead fundamental and applied research for adoption of state-of-the-art

technologies, breakthrough efficiency improvements and new fuels.

Lead development efforts in the Indian power sector including assisting

state utility reform, policy advocacy etc.

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Be a socially responsible corporate entity with thrust on environment

protection, ash utilization, community development, and energy

conservation.

NTPC Core Values

Business Ethics

Customer Focus

Organizational and Professional Pride

Mutual Respect and Trust

Innovation and Speed

Total Quality

DSCMIT 32

CHAPTER-2

DSCMIT 33

INTRODUCTION AND BACKGROUND OF NTPC UNCHAHAR

ORIGIN AND GROWTH:

Unchahar Station’s foundation stone was laid by Late Prime Minister Mrs.

Indira Gandhi in June 1981 for five units of 210 MW Its first and second

units of 210 MW capacity each were commissioned in 1988 & 1989

respectively during Uttar Pradesh Rajya Vidvut Utpadan Nigam (UPRVUN)

period.

The plant performance was for below the expected level of the stakeholders

whereas the performance level of NTPC owned contemporary station was

much above the national average instilling confidence amongst the

DSCMIT 34

customers in general and sector players in particular regarding the

company’s ability and capability to deliver the desired results. Under such

scenario in 1992, NTPC was entrusted with the responsibility of

transforming Unchahar from low performing station to bring at par with

NTPC’s station. Thus it become the first take over station for NTPC with a

challenge to bring about performance turn around.

The installed capacity of the station which was 2 x 210 MW at the time of

take over has been doubled by adding two more units of 210 MW capacity

each in 1999 & 2000. One more unit of 210 MW is added in 2006.

The operational performance level which was 18% Plant load factor with

27% availability at the time of takeover was significantly improved using

de-bottlenecking techniques. Plant load factor went up to 35.5% in first six

month and 73.7% in twelve months. Corresponding Availability Factor

improvement was 49.5% and 79.5% respectively. Further within a span of

four years after takeover the yearly Availability& PLF level of 2 x 210 MW

units was improved to 94% & 84% respectively. This outstanding

performance of the station was achieved by supplementing key operational

areas with well trained personnel drawn from NTPC owned station and

bringing about work culture change amongst the employees taken over from

previous management.

Consolidating on the above and with addition of 2 x 210 MW units, the

operational performance level of 4 x 210 MW station was further improved,

through concerted efforts by dedicated team, training & development of

DSCMIT 35

employees, introduction of NTPC’s system on operation and maintenance,

adoption of latest available technologies. The station continuously improved

its ranking year after year and has now attained 1st position in NTPC and 3rd

in the country during current financial year 2005-06 with a PLF of 95.69%.

The plant has risen from rock bottom performance levels to country’s top

performing station while operating in regulatory regime and using wide

variety of coal having an ash content around 40%, received from more then

30 sources.

Safe handling and environment friendly disposal of approximately 6,000 MT

of ash generated on daily basis itself was a big challenge. The conventional

wet ash disposal system was partly converted to dry fly ash system to

facilitate its utilization. Further the system was augmented to facilitate and

achieve 100% ash utilization.

A BRIEF PROFILE OF THE PROJECTTable-6

Location In Unchahar Tehisl, Raebareli District PIN-

229406

Approach On Lucknow Allahabad State Highway 120 Km

from Lucknow, 85 Km from Allahabad and 35

Km from Raebareli.

Land Area For Stage-I 1953 Acres including township. For

Stage-II 250.7 Acres

Approved Capacity 1050 MW

Installed Capacity Stage I & II : 840 MW (2 x 210 + 2 x 210 MW)

DSCMIT 36

Stage III :210 MW (1 x 210 MW)

Coal Source CCL, BCCL, ECL – Coal Mines approx 700 Km

fro the station

Fuel requirement Around 14,000 MT per day

Water Source Sharda Sahayak Canal (Main Source), Dalmau

Pump canal during shutdown of Sharda

Sahayak Canal

Approved Cost Stage I & II : Rs 2337.09 Crores

Stage III : Rs 938.61 Crores

Unit Commissioned Unit I : 210 MW November 1988

Unit II: 210 MW March 1989

Unit III:210 MW January 1999

Unit IV : 210 MW October 1999

Unit V : 210 MW September 2006

Power Evacuation Double circuit 220 KV lines to Lucknow

(UPPCL), two double circuit line to Kanpur

(PGCIL)

PRESENT STATUS AND FUTURE VISION OF THE ORGANISATION:

Graph-4

Power Allocation

DSCMIT 37

Graph-5

Station Generation

DSCMIT 38

Financial year

MU

Unchahar’s turn around has been wonderfully brought out in the book

“India 2020- A Vision for the New Millennium” by none other then first

man of our country, president A.P.J. Abdul Kalam. The contents are as

given.

Let us not overlook successes even in this gloomy situation. Unchahar

thermal power station was acquired by NTPC from government of Utter

Pradesh. Performance was improved dramatically by using de-bottlenecking

techniques. Prior to the take over the Unchahar station had a PLF of 18%; in

six months thereafter it went up to 35.5% and in the twelve months to 73.7%

! The availability factor which was 27% at the time of takeover, went up to

49.5% six months later and about 79.5% after 12 months.

Specific oil consumption, which is an indicative of wastage and inefficiency

of operation, which was at 21.8 milli litres (ml) per Kilowatt hour (KWh) at

the time of takeover went down to 6.3 ml/KWh in 12 months.

These dramatic result have been obtained under ordinary or even oppressive

circumstances, and despite the absence of recognition by the system. While a

day’s power breakdown or an audit report on delay or excessive project

costs hits headlines, nobody even brothers to mention these achievements in

a small column of a newspaper. Nor even is such achievement talked about

by politicians or bureaucrats !

We don’t know who are the heroes & heroines who made these

achievements possible through teamwork !”

DSCMIT 39

ORGANISATION CHART OF NTPC-UNCHAHAR

DSCMIT 40

GM

AGM (O&M)AGM (Projects)AGM(Commg)

DGM (EEME)

DGM (EED)

DGM (AMG)

DGM (C&I)

DGM (T/S Adm)

DGM (TGOS)

DGM (MTP)

DGM (F&A)

DGM (BMD)

DGM (HR)

DGM (Mech E) DGM (EMD)

DGM (Opn)

DGM (FM) SR MGR(Safety)

DGK (TS)

CMO

DGM (TQM)

DGM (FQA)

DGM (C&M)DGM (FES)

Dy Mgr (Vig)

SWOT Analysis

STRENGTHS:

Govt. of India granted “Navratna” status with power of operational

authority to the board of NTPC.

NTPC has achieved all the targets to be rated “Excellent” during

2005 -06 for the nineteenth consecutive year since inception of the

MOU system.

Ranked 3rd “Great Place to work for in India” by M/s Grow Talent

and Business World 2005.

DSCMIT 41

A part of ISO 9001:2000, ISO 14001:2004, OHSAS 18001:1999 and

SA 8000:2001 systems.

NTPC stations having achieved a PLF of 92.15% in the year 2004-

2005.

A "Centre for Power Efficiency and Environment Protection” has

been established in NTPC with the assistance of United States Agency

for International Development. (USAID).

NTPC is committed to the environment, generating power at minimal

environmental cost and preserving the ecology in the vicinity of the

plants.

Based on 1998 data, carried out by Datamonitor UK, NTPC is the 6th

largest in terms of thermal power generation and the second most

efficient in terms of capacity utilisation amongst the thermal utilities

in the world.

WEAKNESS:

Railway has limitation of carrying goods.

Limited sources.

Too much distance between mines and Plants.

Monopoly of suppliers.

DSCMIT 42

OPPORTUNITY:

There is high demand for electricity so there is good opportunity to

growth.

Growing different power generation areas.

Improvements of technology.

THREATS:

Cyclical & Rising Furnace Oil Prices.

Process orientation has been further reinforced by having ISO systems

for quality, environment and safety.

In area of power generation other competitors may affect the

generation of NTPC.

DSCMIT 43

AWARDS AND ACCOLADES OF NTPC FGUTPP

DSCMIT 44

FGUTPP rated 5th best power station in the country in the FY 2001-

2002.

FGUTPP has won silver medal under Meritorious Productivity

Scheme of GOI for the years 1997-98 & 1998-99 consecutively.

Control Point quality circle stood first in the Northern Region QC

Competition organized by Confederation of Indian Industries (CII) at

Lucknow on 23rd Sept. 2000.

Adjudged best in Cultural programme in Kanpur chapter convention

of quality circle organized by Quality Circle Forum of India (QCFI) at

Kanpur during 26th – 28th Sept. 2000.

Stood 2nd in National Convention of Quality Circles of NTPC Farakka

during Jun 2001.

Awarded 1st prize in slogan competition and meritorious award in QC

presentation at National Convention of Quality Circles held at

Hyderabad from 20-22 Dec. 2001.

Awarded the first prize of prestigious National Award of Environment

& Ash Utilization for Thermal Centenary Celebration 1999 (under

700 MW category) by Ministry of Environment and Forests.

Won the Safety award from British Safety Council for two

consecutive years (1998-1999).

FGUTPP received second best for Industrial Relation (IR) Award for

two consecutive years i.e. 1999-2000 & 2000-2001.

Two children from FGUTPP won “Bal Shree” award for the year

2000 & 2002. The award was presented by President of India at

Rastrapati Bhawan.

“Ayurmanch” from hospital won 2nd place in national professional

DSCMIT 45

competition held at PMI on 19th Dec. 2001.

“Shram Shakti” quality circle stood first in NTPC Northern Region

Convention held at Singrauli in Jan. 2002.

Construction work of Unit #4 completed without any reportable

accident.

Awarded with ISO 9001:2000, ISO 14001:1996 & OHSAS

18001:1999 certificates for its Quality Management, Environment

Management and Occupational Health and Safety Management

systems.

Winner Shield for the best performance in protection of environment

and ash utilization for 2001-2002.

GOI Productivity Awards in the field of Fuel Oil Consumption in

1992, 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000.

GOI Productivity Awards in the field of Auxiliary power consumption

in 1992, 1995, 1997, 1999.

Certification of 5’S’ in Dec. 2003.

Certificate from District Magistrate for employment of Handicapped.

Gold Medal for Peak-Hour Generation in FY 2001-2002.

Silver Medal for Peak Hour Generation in FY 1997-1998-99 and

2002-2003.

FGUTPP rated 9th best power station in the country in the FY 1999-

2000 & 2000-2001.

Received Golden Globe Award (2003-2004) for Industrial Relations

Green Tech Safety Gold Award for 2004-2005.

DSCMIT 46

CHAPTER-3 Detail Study of the departments

DSCMIT 47

CONTRACT

DSCMIT 48

An agreement between two or more competent parties in which an offers is

made and accepted, and each party benefits. The agreement can be formal,

informal or written. Some contracts are required to be in writing in order to

be enforced.

In NTPC 50% work are done by contract basis

Contract functions in NTPC Projects/Station can be classified into two broad

categories i.e.

Pre- award Activities

Post-award Activities

This Pre-Award Contracts covers various activities starting from

conceptualizing and preparation of the indent to award of Contract. The

basic framework is provided by the Delegation of Power and Work &

Procurement Policy of NTPC. The main activities relating to pre-award

function along with the responsibility centre and the approving authority

have been identified as detailed hereunder and a few of these described in

detail thereafter.

Table-7

SN MAIN ACTIVITIES RESPONSIBILITY APPROVING

AUTHORITY

1. Technical Approval &

Administrative approval

of Cost Estimate

Indentor / Tech.

Services

Competent

Authority (C.A.)

as per

Delegation of

power

2. Budget Certification Indentor / Tech. Finance

DSCMIT 49

Services

3. Mode of Tendering Contracts C.A. as per

D.O.P.

4. Qualifying Requirement

(QR)

Indentor / Tech.

Services (ruted

through QR

Committee)

GM (Project)/

HOP/HOS

5. Preparation of Technical

Specification, drawing &

Scope of work

Indentor / Tech.

Services

C.A. as per

D.O.P.

6. Preparation of Tender

document

Contracts (Technical

Specification to be

provided by the

indentor)

C.A. as per

D.O.P

7. Issue of Notice Inviting

Tender (NIT)

Contracts C.A. as per

D.O.P

8. Constitution of Tender

Committee (T.C.)

Contracts As per D.O.P.

9. Opening of tender Contracts (presence

of an executive from

Finance deptt. is

also required during

opening pf the

tender)

DSCMIT 50

10. Technical evaluation (if

required)

Indentor / Tech.

Services

11. Preparation of

Comparative Statement

(CS)

Contract to be

vetted by Finance

12. Co- ordinating T.C.

Meeting

Contracts on behalf

of the Committee

13. Commercial evaluation

by T.C.

Contracts

14. Preparation of evaluation

report and its approval

T.C. As per D.O.P.

15. Pre- award discussion and

approval of resolution

T.C. As per D.O.P.

16. Award of Contract and

Issue of Letter of Award

(LOC)

Contracts to be

vetted by Finance

Signing

Authority as

per DOP

17. Signing of Agreement Contracts to be vetted

by Legal deptt.

As per DOP

TECHNICAL APPROVAL

Requirements are firmed up by the indenting department. Requirement

should be detailed and specific. Approval of the Competent Authority is

DSCMIT 51

obtained as per DOP by the indenting Department, for technical

requirement’s.

COST ESTIMATE

The cost estimate of a package should be as realistic as possible. Generally

the cost estimate will be prepared based on the CPWD, Delhi Schedule of

Rates (DSR) for civil works and Schedule of Rates (SOR) for electrical

works.

MODE OF TENDERING

Section of agency for the purpose of execution of work should be done on

the basis of competitive bidding.

For the purpose of Tendering, the following shall be kept in mind :

The option of bidding could be through Open Tender or Single Tender basis.

While choosing the mode of tendering, reasons/justification for selection of

the particular mode should be recorded while obtaining the approval of the

Competent Authority.

Estimated cost of the work to be indicated in the Notice Inviting Tender

(NIT) will be 90% of its approved cost estimate.

Earnest money deposit (EMD) and the cost of tender documents shall be as

per the guidelines issued by Corporate Contracts from time to time.

OPEN TENDER

Open tender will be resorted to for high value packages in line with

provision of D.O.P. Abridged version of Notice Inviting Tender (NIT) shall

DSCMIT 52

be published in Newspapers on all India coverage basis and detailed NIT

shall be published on NTPC’s website and other free private website. Such

NIT will have provisions for appropriate Qualifying Requirements (QR)

depending on the value and nature of job. It is important to ensure that the

terms and conditions stipulated in NIT or not. (Normally for indent value

of Rs 5 lacs and as per DOP guidelines issued from time to time)

LIMITED TENDER

By invitation to sources already registered with NTPC or having proven

performance in past or any reference document as per Work and

Procurement policy. Whenever the estimated cost of the package does not

warrant / justify action for open tender, as provided in the DOP, Limited

tendering will be resorted to. For the purpose of Limited Tender, selection of

parties should be done carefully and in a transparent manner. (for Indent

value normally below Rs. 5 lacs and as per DOP guidelines issued from

time to time.)

SINGLE TENDER

The mode of Single tender should generally be avoided except in case of

items of proprietary nature, extreme urgency and uncommon nature of work

calling for specific skill and experties etc.

Finalization of rates in case of single tender is to be done very carefully

since there may not be any supporting offers / basis available for

verification/ justification of the quoted price. Therefore it is important that

the responsibility of the price are ensured before awarding the contract.

DSCMIT 53

Responsibility can be ascertained by comparing with the ordered price of

any other unit of NTPC or other public sector/Govt. Agency.

TENDER DOCUMENT

In case of open tendering the order document shall, interalia, contain the

following :

Reference to detailed specification and drawing wherever necessary.

Qualifying requirements carefully designed to permit entry only to

tenderers who posses the technical, financial and managerial

capability to perform and the same will be finalised by committee.

Reference to General Purpose Condition (PC) applicable to the

transaction.

Special terms and conditions (if necessary).

Quantity schedule.

Delivery period.

Instruction to bidders.

Proforma and guideline s for submission of EMD in the form of BG.

In case of single and limited tendering where tender enquiry is required to be

used regularly to registered vendor or vendors having proven performance in

the past, qualifying requirements and general purchase condition may not

required to be included in each of the invitations to the tender. Document as

mention above shall however from part of tender document in each case of

open tendering.

DSCMIT 54

TENDER COMMITTEE

As per Delegation of power beyond certain value of procurement a tender

committee consisting of representatives of indenting Deptt. and finance

Deptt. needs to be formed to finalised recommendation of the procurement

action witch may be approved by competent authority.

Tender Committee may be constituted by members from the group which is

raising the indent, dealing officer in Materials department at appropriate

rank and the corresponding officer in the Finance Concurrence Group for all

cases exceeding the ceiling limit as per DOP. The TC should consider and

recommend all the terms and condition, prices, QAP and inspection

procedures, phasing delivery, if any required.

QUALIFYING REQUIREMENT

The Qualifying requirement (Q.R.) is required for open tender only. Q.R. is

to be prepared on case to case basis depending on various factors like Cost

of the Package, Technical Importance. Time Frame for implementation and

Quality Plan requirement etc. The primary purpose of Q.R. is to asses the

Financial & Technical Capability of the bidders who can deliver the

Goods/services as per the requirement.

For Qualifying Requirement Q.R. of a package, a committee will be

constituted at projects/station with representative of site Materials. Finance

and Indenting departments at appropriate level. The Q.R. will be approved

by the Head of project / station or the award approving authority of the

package whichever is of lower level. However for functional convenience

project / station may consider a standing Q.R. committee.

DSCMIT 55

Q.R. once stipulated in the NIT cannot be altered / relaxed. In case of poor

response against a stipulated Q.R., the Q.R. committee may review the same

and revise for the purpose of re-floating the tender.

PREPARATION OF TENDER DOCUMENT

Completeness of tender documents make the task of tender preparation,

evaluation and award much easier. It also helps smooth execution of the

work by eliminating the possibility of disputes/ differences arising out of

conflicting interpretation of conditions. The important areas, which are to be

taken care of while preparing the tender document, are as follows :

SCOPE OF WORK

SPECIFICATION

TERMS AND CONDITION

CHEQUE POINTS FOR THE PREPARATION OF TENDER

DOCUMENTS

Following specific instructions are to be included in the Tender

document :

Language of Bid – in English.

Instruction for Bid security (Relaxation, wherever applicable, to be

mentioned).

Instruction for bidder qualification (QR), wherever applicable.

P.F. code number prom RPF commissioner.

Instruction for recording the deviation/ exception. Specific mention

for unacceptable deviation that will make the offer non responsive.

Mobilisation details, wherever required.

DSCMIT 56

Quality plan, wherever required.

Wok programme.

Bid validity.

Correction of arithmetical errors.

Evaluation criteria.

The bound signing of contract agreement.

Performance gurantees.

NOTICE INVITING TENDERS (NIT)

In case of open tenders where NITs are issued, the detailed NIT on websites

should contain the following information :

1. Corporate signature

2. Project name & location

3. Mode of Tendering

4. Formal Invitation (NIT no. & Date)

5. Brief scope of work

6. Details of sale of tender Document, Bid submission & Bid opening

7. Cost of Tender Document

8. Value and mode of Bid Security

9. Specific Qualification Requirement

10.Any specific requirement

11.Address for Communication

BID OPENING

Tender will be opened on the due date and time indicated in the tender

enquiry, in the presence of authorised representative with proper

DSCMIT 57

authorisation of the tenderers, if they wish to present themselves. The

tenders will be opened by purchase and finance executive nominated by

respective HODs. When the tenders are opened the name of all present

tenderers would be read out for the benefit of the tenders present and the

quoted rates of each tenderers will also be read out. Any omission or

irregularity such as absence of signature of a tenderers, absence of earnest

money deposit, references etc. may be pointed out on the spot for the

information of the tenderers. All the tenders opened will be entered giving

details as under :

Name of the work.

NIT no. and date.

Bid opening date and time.

Names of the parties who have submitted the offers.

Details of EMD.

Name & Signature of the bidders representatives attending.

Signature of the NTPC- members opening the Tender.

BID EVALUATION

Bid evaluation should be carried out strictly in line with the evaluation

criteria mentioned in the tender document. All technical and commercial

conditions, deviations taken by the bidder and entered in the standard

deviation statement should be cost compensated by the cost of withdrawal

mentioned by the bidder therein. However for case where deviation alone

has been mentioned in the statement without giving the cost of withdrawal,

the financial implication of the Deviation should be estimated in a fair and

DSCMIT 58

reasonable manner for the purpose of cost compensation during the

evaluation.

EVALUATION REPORT

Based on the technical and commercial evaluation of the tenders, the tender

committee will put up a final evaluation report for approval of the

Competent Authority. The evaluation repot should generally include the

following details alongwith the detailed evaluation :

1. Name of the package.

2. Brief Scope of Work

3. Cost estimate

4. Invitation to Bid

5. Preliminary evaluation

COMPARISON OF THE EVALUATION BID

Comparison of the evaluated lowest (L1) technically and commercially

responsive/ acceptable bidder with respect to the approved cost estimate and

reasonability of the offer is to be mentioned. Apart from reasonability of the

total tendered amount, any abnormal variations in the rates of particular

item/items are also to be deliberated.

APPROVEL FOR PLACEMENT OF AWARD

Tender committee shall put up a proposal for approval of the Resolution

reached with the successful bidder to the Competent Authority

DSCMIT 59

PLACEMENT OF AWARD

Draft latter of Award shall be prepared by Contract in the line with

guidelines issued from time to time in this regard, specially highlighting the

post bid resolutions.

Draft latter of award shall be vetted by Contracts and Finance for the

correctness of the contents of the latter of Awrd.

Latter of Award shall be signed and issued in duplicate by the Contract

Executive authorized as per DOP.

ACCEPTANCE OF LETTER OF AWARD

Contract Deppt. Should obtain the duplicate copy of Latter of Award duly

signed by authorised representative of contractor on each page, as a token of

acknowledgement, unequivocal acceptance and confirmation of the Latter of

Award, within 15 days of issuance of LOA.

VENDOR REGISTRATION

For the purpose of vendor registration, Abridged Notice Inviting application

from prospective vendor to be published in the leading newspapers on all

India basis and detailed notice to be hosted on the website of NTPC and

some other free private website as per Corporate Contracts and subsequent

amendment/ instruction issued from time to time. Application will be invited

for different categories of vendors depending on value and nature of job.

DSCMIT 60

LATE AND DELAYED TENDER

Late tenders are those which have been posted on or after the due date and

received subsequently. Tenders received through couriers after the bid

opening time and date shall be treated as late tenders. Delayed tenders are

those which have been posted before the due date but received after the bid

closing time and date.

Delayed tenders received through Regd. Post / Speed Post which clear postal

stamp showing date of posting as before the tender opening date and

received within 6(six) working days of bid due date, may be opened and

considered with the approval of competent authority. In case of decision on

the tender has been taken earlier to six working days, they shall not be

opened.

Delayed tenders, without superscription of tender enquiry No. and due date

will naturally be opened in normal course. In advertently such tenders and

offers received in open condition may be returned to the venders

immediately by the concerned executive with the approval of HOD

(M&CS).

NEGOTIATION

Negotiation should not be normally undertaken wherever adequate

competition exists. However, if it is found that the price are unreasonably

high / low as compared to the last purchase price / estimate or in case of

some technical / commercial clarification, negotiation can be done with the

approval of competent authority as per DOP.

DSCMIT 61

Normally negotiation should be held with technically and commercially

evaluated lowest (L1) vendor only.

EARNEST MONEY & SECURITY DEPOSITE

For enlistment / registration of supplier the cost of documents (Application

form) and registration fees as prescribed shall be applicable. In addition

Refundable Security Deposit of Rs. 10,000/- will be furnished by the

vendors on being registered.

While sending enquiry to the parties, Earnest money may not be insisted in

case of limited tender / single tender, for packages of estimated value up to

Rs. 2.0 lacs after taking appropriate actions in line with Corporate Materials

Circular and its amendment issued from time to time. For Limited Tender &

Single Tender case above Rs. 2.0 lacs, EMD may be asked for depending on

the merit of the case.

ERNEST MONEY DEPOSIT WILL BE REGULATED AS FOLLOWS

:

Estimated value EMD Money

Up to Rs, 500 lacs - 2% estimated value

Above Rs. 500 lacs -1% subject to minimum of

Rs. 10 lacs

DSCMIT 62

DSCMIT 63

Purchase is divided into three parts-

I. Indent

II. Enquiry

III. Purchase order

INDENT:

For the purpose of indenting materials planning is to be done on the basis of

following groups:

1. Stock items(Automatic Recoupment items)(AR)

2. insurance items(I)

3. Unit replacement items(UR)

4. Capital items(P)

5. Other non-stock items(O)

ABC classification of items:

ABC analysis is a technique by which selective control can be exercised on

all Materials Management activities.

A-class items: Items having annual consumption over Rs 1

lakh

DSCMIT 64

B-class items: Items having annual consumption over Rs

10,000 & up to Rs 1 lakh

C-class items: Items having annual consumption up to Rs 10,000

Mode of indenting:

1. For A class items of spares in nature, indenting shall be done

equipment wise. However for ‘A’ class consumables, the same may

be clubbed for similar type of items. For ‘B’ & ‘C’ class items,

indenting shall be done on the basis of main group. Each indent

should contain items of same main group.

2. The indent as per described format should be completed in all

respects with the following information’s.

a) Description of item should contained detailed

specifications which should include the relevant IS/BS

standard or any other acceptable standard drawing details etc.

so that calling of sample may be avoided as far as possible.

b) Quantities to be intended item wise shall depend on past

consumption, anticipated consumption in future, nature of

item including shelf life & classification of items as above.

c) Estimated value of the indent should be as far as practicable.

Basis of estimates should be either on last purchase price with

DSCMIT 65

escalation if any or market trend or on the basis of technical

specifications e.g. Size, weight etc.

d) Indent should be raised only when the budget is allocated for

that section/group. In case of extreme urgency and when the

budget is not allocated the same can be raised with the

written approval of head of project & same will be got

certified by finance budget section before placement of

purchase order.

e) Approval of indents to be done as per existing delegation of

power issued from time to time & in

accordance with the provision of works & procurement

policy.

f) Scrutiny of indents by purchase

Before registration of indents, purchase section shall

scrutinize the indents with regard to various points e.g.

completeness of specification, realistic delivery period,

proprietary article/standardization certificate, approval of

competent authority or any other deficiencies in the drawing

etc. requiring clarification in the absence of which

procurement is not possible.

g) Registration of indents

The indent will be registered in purchase section through

computer & 6 digit no. shall be given.

DSCMIT 66

h) Regulation of indents by stores

All indents shall be forwarded by the indenter to stores (MPIC

group) for achieving the following objectives.

I. Verification of adequacy of material

specifications/quality plan/inspection procedure.

II. Stock availability & expected deliveries if any.

III. Substitution of near identical material for the indented

item, if available.

IV. Review of quantity of item if required to achieve

economic/optimum procurement.

V. Correctness of the data furnished in the indent which is

essentially required for a tender finalization without

resorting to another reference after tenders are open.

ENQUIRY-

MODE OF TENDERING-

1. Open Tender:

In this the advertisements are given in newspapers and also on the

website of the company. So the interested parties can send an intent

DSCMIT 67

letter to the company after reading this advertisement. This is

usually given for indent value of Rs 5 lacs or more.

2. Limited Tender:

In this the parties which are already registered with NTPC or in past

have proved themselves are invited. This is usually given for indent

value less than Rs 5 lacs.

3. Single Tender:

In this there is only a single party. The party may be OEM/OES or

the tender is provided if there is urgency.

Selection of modes of tendering:

The mode of tendering shall be selected based on:

a) Total estimated cost of the purchase to be made.

b) Type of materials.

c) No. of proven parties known & available.

d) Urgency of requirement.

Tender documents:

In case of open tendering, the tender documents shall contain the following:

DSCMIT 68

a) Reference to detailed specification and drawing wherever

necessary.

b) Qualifying requirements carefully designed to permit entry only to

tenderers who possesses the technical, financial and managerial

capability to perform and same will be finalized by the committee.

c) Reference to General Purchase Condition (GPC) applicable to the

transaction.

d) Special terms and conditions (if necessary).

e) Quantity Schedule.

f) Delivery period.

g) Instruction to bidders.

Qualifying Requirement:

The qualifying requirement (Q.R.) is required for open tenders only. Q.R. is

prepared on case to case basis depending on various factors like cost of the

package, Technical importance, time frame for implementation and quality

plan requirement etc. The primary purpose of Q.R. is to assess the financial

and technical capability of the bidders who can deliver the goods/services as

per requirement.

For the purpose of formulating Q.R. of a package, a committee will be

constituted at projects/stations with representatives of site materials, Finance

and indenting departments at appropriate level.

DSCMIT 69

While preparing the Q.R. it is to be ensured that the Q.R. does not become

too stringent leading to poor or no response. It is therefore necessary to

indicate the no. of parties likely to meet the Q.R. being proposed for a

particular package.

Cost of tender documents:

In case of open tender the tender documents fee shall be decided on the basis

of estimated value of the indent before going for advertisement. Accordingly

same shall be fixed as per the following guidelines:

Table-8

S.I. No. Estimated value of indent Cost of tender

documents

1. Upto Rs. 10 lacs Rs. 200/-

2. Above Rs. 10 lacs & upto Rs. 25 lacs Rs. 300/-

3. Above Rs. 25 lacs & upto Rs. 50 lacs Rs. 500/-

4. Above Rs. 50 lacs & upto Rs. 100 lacs Rs. 750/-

5. Above Rs. 100 lacs & upto Rs. 500 lacs Rs. 1500/-

6. Above Rs. 500 lacs Rs. 3000/-

Tender opening:

Tenders will be opened on due date and time indicated in the enquiry, in the

presence of authorized representative with proper authorization of tenderers,

DSCMIT 70

if they wish to present themselves. The tenders will be opened by purchase

and finance executives nominated by respective HOD’s. When the tenders

are opened the name of all present tenders would be read out for the benefit

of the tenderes present and the quoted rates of each tender will be read out.

In case of difference in the rates quoted in figures and words, the amount in

words shall prevail.

The bid opening date as notified to the bidders through enquiry should be

strictly adhered to. However, in case of unforeseen circumstances or due to

administrative reasons the bids are not opened on the due date. The same

shall be opened on the next working day at the same time without any

further approval. In case of holidays the bids received up to the time of

closing of bids on the next working day shall be considered for opening.

PURCHASE ORDER:

After then tender is awarded the purchase order is generated and all the

required items are purchased.

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FUNCTIONS OF STORES WING

1. The Site Materials Management function ensures adequate and timely

supply of materials at right price to the contractor for smooth

execution of power projects and to operating departments for smooth

running of the power plants. The major tasks performed by Stores

Wing forming a part of the materials management function are as

follow:

2. To arrange clearance, receive, inspect / arrange inspection, accept,

arrange payment and store materials.

3. To systematically issue the materials for construction, erection, and

operations etc.

4. To maintain uptodate records on procurement, issue and stocks.

5. To maintain continuing and sustained liaison with the Purchase Wing,

Finance, Indenting Department, suppliers and streamline the optimum

and smooth flow of materials by transporters for speedy release of

payments and expediting settlement of rejection, disputes etc. that

arise from time to time regarding materials supply.

6. To plan and arrange preservation, storage and requisite materials

handling facilities.

7. To procure insurance policies for various assets of the organisation,

covering various risks as per the policy, prefer claims for losses and

pursue settlement.

8. To identify surplus and obsolete materials at the earliest and scrap.

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9. To judiciously regulate the flow of materials by coordinating with

Purchase / supplier / Inventory Planning so that service levels are

maximized and inventory kept to the optimum.

10.To maintain proper accounts of materials arranged.

11.The organization will be headed by a Head of Materials Management

(HOMM) whose role and function are described below:

12.The stores Wing will function under the direction and overall

supervision of HOMM. The responsibility of ascertaining the need of

materials and stores of the power plant and of arranging the supply of

such materials and stores in the most efficient, economic and

expedient manner possible, shall lie with him. He will also be

responsible for the receipt, inspection and custody of materials and

finally for their issues on indents received from the authorized

officials of NTPC.

FUNCTION OF HEAD OF MATERIALS MANAGEMENT (HOMM)

The stocks of stores on hand, whether with the Stores Wing or other

departments represent funds which are non-productive. While stocks should

be such that stores required by NTPC are readily available, they should be a

small as possible and losses due to obsolescence or deterioration should be

minimum possible. The centralized control over the storage and procurement

functions that is required for this purpose will be vested in the HOMM, who

will be the head of MM deptt. and will be responsible for the Purchase and

Inspection; and Custody and Issue of Stores.

All materials for which the consuming deptts. have no immediate use should

be returned to the stores wing. The HOMM shall be responsible for their

DSCMIT 74

survey and valuation, and the disposal by sale or otherwise. He shall also

deal with all surplus and unserviceable materials of NTPC.

The HOMM is not a disbursing officer, nor is he required to keep general

accounts of the Stores transactions. His duties in this respect will be limited

to the maintenance of numerical records of stores in stock and preparation of

the initial documents of receipt and issue.

GENERAL / SUPERVISORY CONTROL

The HOMM shall arrange for submission to him of such statements and

returns as may be necessary to keep him informed of the stocks available in

his depots, the manner in which the indents of the departments are being

complied with, the inflow of materials not required by the deptts. and the

steps taken to dispose of surplus and unserviceable stores.

PLANNING OF SUPPLIES OF STORES

The HOMM is responsible for preparing a correct estimate of the quantities

of stores to be purchased and for making the most suitable arrangements

possible for the economic purchase of stores. In this, he will be guided by

the Purchase and Work policy, the contract rules and the rules prescribing

the purchase of certain articles through specified agencies.

FUNCTIONAL GROUPS

In order to facilitate division of responsibility of Materials Management

Deptt. involving following functional groups:

Storage function

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Purchase

Policy planning and monitoring

STORAGE

Storage Operations are divided into three distinct areas on the basis of

distinct activities:

1. Good Receipt

Goods clearance and dispatch

Goods inspection & inward movement

Risk Management

2. Custody and Warehousing

3. Materials Planning and Inventory Control.

GOODS RECEIPT SECTION

Goods Receipt section shall be responsible for the following major

functions:

1. Goods clearance and dispatch

2. Receipt and arranging inspection of materials

3. Custody of rejected items and un connected consignments

4. To have insurance coverage and handle claims for damages and

shortages and rejection of materials and pursue settlement thereof.

5. To maintain store of approved samples

6. In-ward movement and handing over goods to custody and

warehousing section.

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CUSTODY AND WAREHOUSING SECTION

The section shall be responsible for the following :

Receipt of inspected materials in the custody cell ( also variously

called godowns, sheds, yards etc.)

Issue of materials to indenting Deptts.

To plain and arrange preservation, storage and requisite material

handling facilities.

To identifysurplus and obsolete materials and arrange their disposal.

MATERIALS PLANNING & INVENTORY CONTROLMATERIALS PLANNING

This involves forecasting materials requirement, pricing and fixing

inventory. It also includes preparation of materials budget and scheduling of

the orders.

INVENTORY CONTROL

It involves fixing order quantities, setting inventory levels and safety stock

levels, designing implementing inventory system, selective control of

inventories, analysis and control of lead times.

MATERIAL CODIFICATION & STANDARDIZATION

It involves allotting the codes to each item of the stores as well as standardization of description to be mentioned on all indents, receipt, issue vouchers and other documents.The variety reduction / rationalization activities shall also be undertaken by

the group in order to enhance the quality and effectiveness of controls.

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EDP CO-ORDINATION & MIS

This involves the co-ordination with the EDP Group regarding

computerisation and generation of various MIS reports from time to time.

PURCHASE

This involves selection of source of supply, obtaining competitive

quotations, finalization of terms of purchase, placement of Purchase Order

and follow-up for completion of supplies and payment to supplier.

POLICY PLANNING AND MONITORING CELL

This will be an important organ of materials management directly

responsible to HOMM. Its function shall be to identify major activities

fixing targets, keeping track thereof, monitoring and coordinating with

various agencies within and without NTPC.

MATERIAL IDENTIFICATION (CLASSIFICATION & CODIFICATION):

NTPC projects have 40,000-50,000 items (spares, consumable and others) in

store at each of the power stations. Basic prerequisite in managing inventory

of such a large number of items is accurate identification of each part or raw

material. It must be possible to classify like items in order to control variety

and explore interchangeability and introduce standardization. As accurate

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description would involve a lengthy written explanation in many cases,

NTPC has adopted use of codes for describing inventory items.

The corporation has decided to use a 10 digit significant coding scheme for

assigning codes. In this scheme, a group of 10 digit positions denotes some

definition of that attribute. Exercise involved in identifying various attributes

and their values for each class of item is laborious and time consuming.

Therefore, till the time a code based on a crude, but faster method called

provisional/temporary code scheme.

As and when significant codes, also called permanent codes get developed,

temporary codes are replaced in a systematic fashion.

Digit 1 2 3 4 5 6 7 8 9 10

Position Main sub group will Location S.I. No. Check Group always be ‘00’ code digit

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HUMAN RESOURCE IN NTPC

People Resource are Planned, managed and improved

NTPC believes in achieving organizational excellence through Human

Resource and credits its success to the strong performance focus &

organization loyalty of its employees. Our human Resource philosophy,

which is based on the “NTPC HR Model” can be captured in its HR Vision.

Human Resource Vision

“To enable our people to be family of committed worldclass

professionals, making NTPC a learning organization”

HR department has been playing a strategic role in NTPC. It has been

dynamic partner in achieving excellence through the most vital asset of the

organization, its human resources. The HR team has worked hand in hand

with the line managers for making NTPC a preferred employer in the power

Sector. The unique NTPC HR model stand on four pillars of culture

Building, Competences Building, Commitment Building and System

Building. These pillars guide all HR initiative towards building

commitment, culture and competencies of the company’s Human Resource

and also channelise all HR initiatives so as to develop a system orientation.

The HR function at Corporate Centre, formulates vision, strategy and policy

while the Regional Head Quarter is empowered as a growth center and

enabler. The sites such as Unchahar power station act as implementer as well

as cost / profit centers.

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Inputs from projects are taken through interfacing forums of management as

well as through feedback and reporting system.

The employees and their representatives have scheduled meetings with the

management at project level under various forums. A communication matrix

has been developed to streamline such interactions within the organization.

During these meetings the issues that are raised by the employee

representatives on behalf of the employees and need to be addressed at

policy level in Corporate Centre are taken up by Head of HR during various

planned interactions among the HR Executives of entire NTPC.

Employee Profile

NTPC Unchahar has strength of 413 executives, 23 supervisors and 674

workers. The executive team has a strong professional qualification base.

The core function like O&M, HR, Contracts and materials, Finance, Projects

are carried out by our dedicated and highly qualified employees. Non core

activities like housekeeping and security have been out-sourced through

agencies that are expert in their own areas. A compulsory annual medical

checkup is carried out for employees above 40 years once in every two years

and annually for people above 45 years and people working in hazardous

area.

Recruitment

The recruitment of executive is done at Corporate Centre but the

requirement of the same is sent by the project. The requirement of

executives is assessed by effective manpower planning process at site.

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The non – executive are required at the project. The requirement is done on

an all India basis and selection techniques like trade test/ written test,

interview are adopted to select the best candidate for the post. Succession

planning is done at middle management level in the project wherein

executives are identified in specific areas/ departments and are groomed for

position of group head by giving suitable exposure at work, training to

develop requisite managerial & potential competencies etc.

Appraising and helping people improve their performance

The Key Performance Areas are cascaded downward from the company’s

vision/ mission to the individual goals. Since the basic philosophy of NTPC,

which is also reflected in the HR Vision of the company that all employees

should be given equal opportunity to learn, grow and develop in the

organization, only merit is taken into consideration for growth. There is no

distinction in remuneration or opportunities and no difference is made in

allotment of job or terms of payment based on location, city or gender.

The fairness on employment and the satisfaction of employees with respect

to salary & wages along with the open culture of the company has very

explicitly been brought out in employee surveys.

Communicating performance score and development feedback is critical to

create transparency in the system and to make the performance management

system more acceptable to employees. It reinforces good performance by

employees. A transparent communication and feedback mechanism would

also enable development of coaching and mentoring relationship between

superior and subordinates.

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Promotion System

The current promotion system at NTPC provides for time-based, regulated

promotions based on merit, cluster- wise vacancies are notified and

communicated to employees.

People’s knowledge and competencies are identified, developed and

sustained.

NTPC’s stated HR strategy requires “training to be used as a tool for

creating the right attitude and developing competencies among the

employees”. Training is also required to be develop employees knowledge

and skills. With a view to serve the above objectives, NTPC has evolved a

comprehensive training infrastructure. Since Human Resource of the

company is it’s most valuable asset, great importance is attached to their

selection.Utmost care is given to match the skills of the employees of the

company who are indicated on the basis of specific educational qualification,

experience & skills at various levels in the organizational hierarchy. Based

on the knowledge, these employees are posted and further promoted.

People are involved and empowered

Various efforts have been made at NTPC FGUTPP where people are

encouraged to work as individual and in term to initiate improvement

activities like Professional Circle, Quality Circle, NTPC Open Competition

For Executive Talent (NOCET), Suggestion Scheme and Think tank

involving people and empowering them.

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The achievement of the employees/ teams is recognized through a

welldrafted reward & recognized policy of the company. As per the policy

any good work done by an employee or a team is immediately recognized by

giving them a “ Latter of Appreciation”. If an employee continues to do

good work during the entire month, he is rewarded with “Star of the Month”.

A yearlong performance for a non – executive is praised and recognized by

giving him “Employee of the Year” award and an executive by giving him

“Power Excel Award”. All these awards are given in a public ceremony,

meeting of HODs or during a project seminar.

The participation & achievement of employees in various quality initiative

like Quality Circle, suggestion scheme professional Circle, NOCET etc. is

rewarded publicly during 26th January, 15th August, Raising Day function

etc.

People are rewarded, recognized and cared for

The manpower of NTPC FGUTPP was effectively utilized by redeploying

them in two newly constructed units of 210 MW by giving them suitable

training and hence enhancing over all productivity of manpower. Keeping in

view the increased responsibility, the remuneration of the employee has been

suitably hiked in the last pay revision.

NTPC Reward & Recognition

NTPC believes in the power of People and it is the professional philosophy

of the management to create an enabling organizational culture for people to

demonstrate their creativity, initiative and involve in holistic development,

through recognition and celebration of achievements.

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Keeping the above in mind, a bouquet of special Rewards and Recognition

Schemes is evolved with an objective of reinforcing good work and behavior

of employees in order to achieve organizational excellence.

BEST PRACTICES OF HR DEPARTMENT

Starting of Best Teachers’ award for The Performing Teachers in the

Schools

Three no. of schools are presently functioning in NTPC township, out of

which two schools are based on CBSE pattern and one school is based on

UP board.

Teachers play an important role in imparting quality education amongst

children, which is reflected in good results of the school. Good performance

of children in various exams is not only a matter of great satisfaction for the

parents but also give recognition & name to the school & NTPC in totality.

Award for best teacher in subject: Physics, Chemistry, Mathematics,

Biology and Computer. The criteria for selection of the best teacher is:

Class Average.

Class Average for the subject should essentially be more then 75%.

If the difference between the class average of the two teachers is less

then 5% then number of students getting more then 80% shall be the

criteria.

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Payments of all the Dues to the Employee on the Day of Superannuation

All the dues of an employee like PF, gratuity, leave encashment & post

retirement medical benefits are cleared on the day of superannuation &

cheques & requisite documents are given to him. This has resulted in a lot of

satisfaction amongst retiring employees and they continue to have a sense of

pride & ownership for the organization that they have served for such a long

time.

E- Attendance System

An E-Attendance system has been initiated at NTPC Unchahar w.e.f.

1.12.03. The system has following features :

Information to all HODs as regards the total number of employees

from their departments who have come inside the plant premises on a

particular day.

Ensures availability of employees in the plant premises on time &

inculcate a culture of discipline in the plant.

Integration of the present E-Attendance system to the payroll system,

will not require manual intervention related to employee attendance

resulting in saving of productive man-hours.

Regular Visit of GM to the Residence of Employees

General Manager visits the residence of employees on a regular basis, during

these visits, he interacts with the employees & his family members regarding

quality of life in township, well being of ladies & children. Promptness of

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civil and electrical maintenance works, condition of parks & on going

culture & sport activity in the township including schools.

Regular Interaction of Physically Challenged Employees with GM for

Conductive Working Environment

NTPC, as part of its corporate social responsibility, recruited a number of

physically challenged persons. At NTPC Unchahar also 11 physically

challenged persons were recruited in the 1st phase & 06 physically

challenged person in the 2nd phase. GM & HOHR regularly interact with

these employees in order to elicit their well-being and also give them a

felling of togetherness. These efforts have resulted in an excellent

amalgamation of these employees in the work force of Unchahar and all of

them are presently working in their respective area with high morale.

Employee Development Centre

Here employee development centre is well equipped to provide training to

the employees for their respective areas. Training for the latest technologies

and concepts are arranged from time to time. The employees adopt those

ideas to their workplace and apart from this, the knowledge gained by them

is shared with other them members. Through seminars, Quality Circles,

Professional Circles etc. new developments when introduced or otherwise,

are given due publicity and familiarization training are organized for the

benefits of end users.

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Preparation of Training Plan for all the Employees Every Year

In NTPC Unchahar the training Plan provides a wide range of relevant

training programmes and helps a lot in competency building of employees.

The training plan is focused on attitude building, skill up gradation and

knowledge enhancement and will, therefore, be a great tool for competence

building of employees. Through this comprehensive training plan, the

training needs of all our employees are fully addressed.

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FINANCE ARE MANAGED

Financial strategies of Unchahar are derived from the long-term strategies of

NTPC. As per Central Electricity Regulatory Commission (CERC)

guidelines Availability Based Tariff (ABT) is applicable for Unchahar. The

benchmarks on operational and financial parameters are reviewed to fulfill

the expectations of the customer, that of low cost power. With the back drop

managing financial strategies of Unchahar are being framed to attain the

specified Return on Capital Employed (ROCE), generate additional profits

by optimizing operational parameters, maximize the productivity, cost

reduction by efficient management and cutting down the wasteful

expenditure.

Financial process and strategies are being continuously reviewed and

updated keeping in view the evolving trends in the industries. NTPC

prepared detailed financial manuals covering various aspects of finance and

accounts.

The stakeholder’s financial expectations are captured in the interaction with

financial institutions and through the yearly Memorandum of Understanding

(MOU) signed between NTPC and Government of India. The captured

expectations are cascaded through out the organization in the form of yearly

MOUs up to unit levels. Financial planning of the company and Unchahar

are made on five-year time horizon for micro level projections and annual

plan for yearly working. Budget planning is made for construction activities,

operational activities and capital addition schemes and financial parameters

DSCMIT 91

for effective review and monitoring, Budget process has played very vita

role in NTPC since inception. The MOU targets are supported with the

strategy of zero based budgeting for effective control and monitoring. This

strategy has yielded excellent results to NTPC for it’s all round performance

including financial achievements over the years. The financial review of

controllable expenses is done on monthly basis in Site Management

Committee (SMC) and financial review meetings.

In various capital addition schemes, investment decisions are taken on cost

benefit analysis and on pay back calculation. Investment decisions are based

on the recoverability of cost out of tariff and ensuring effective resources

utilization. These proposals are put up to corporate budget and Operation

Services group for their analysis and approval by Chairman and Managing

Director (CMD).

Several financial initiative have been taken in recent times to reduce

inventory, remove un wanted processes and introduce new processes to

bring about customer focus. Several financial practices followed in this

project have yielded positive results in its process management, resulting in

effective resource utilization.For managing working capital, Unchahar is

having a well-defined policy and at the time of conceiving the project,

certain norms were built in and accordingly certain portions are capsulated

through long term and short term sources. Again day-to-day working capital

management is done through effective collection mechanism, collection

through LC, credit from fuel suppliers and with short-term loan arrangement

with banks. Capital expenditure is approved for all the projects through

yearly capital budget mechanism and funded from long-term sources being

DSCMIT 92

arrange from financial institution and through bonds issue. Cash

management is done on centralized basis in order to derive the synergy of

funds. All collection from various clients are being done through banks at

regional office and remitted instantly to corporate office. Remittance to

various projects is being done on daily need basis. Daily funds position at

various sites is being monitored through daily reports and this effective

funds management has resulted in excellent earnings of the company.

Financial Soundness

To maintain and improve the financial soundness of NTPC by prudent

management of the financial resources.

To continuously strive to reduce the cost of capital through prudent

management of deployed funds, leveraging opportunities in domestic

and international financial markets.

To develop appropriate commercial policies and processes which

would ensure remunerative tariffs and minimise receivables.

To continuously strive for reduction in cost of power generation by

improving operating practices.

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FINANCIAL OUTCOMES

Station Turnover

Graph-6

Station Gross Margin-(Profit)

Graph-7

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Station Profit/ Turnover(%)

Graph-8

Above figures are showing Unchahar station’s turnover, gross margin

(profit), station profit per turnover and station’s profit per employee. The

reduction in performance as compared to Memorandum of Understanding

(MOU) in the financial years 02-03 & 03-04 are mainly due to normative

fixed charges, revision of Tariff and implementation of Availability Based

Tariff (ABT) regime. The drastic reduction in 03-04 is due to reduction in

Tariff and adjustments made for the previous year’s Tariff revision.

Last Figure shows performance in terms of operational and financial

management. It is noteworthy that Unchahar has consistently performed well

in terms of operational parameters and the financial parameters in few cases

could not be achieved as mentioned above but have been surpassing the stiff

MOU targets given by the company.

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POWER GENERATION PROCESS

Unchahar generates power using thermal energy of coal combustion. The

coal received at the station is crushed to size 25 mm and transported to the

unit bunkers.This coal is further pulverized in the coal mills and then burnt

in the boiler, which converts the water in to high- pressure steam and high

temperature steam (150 Kg/cm2 & 540 c). this steam rotates the turbine and

generator to produce electric power the power thus generated is transmitted

through 220 KV lines and distributed to the beneficiary states

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COAL

HANDLING

PLANT

(CHP)

BUNKERS /

MILLS

BOILERSTURBO

GENERATOR

TRANSFORMER/

SWITCH YARD

ASH

CEMENT / BRCKS

Coal Steam

Water

Electricity

The fuel gas coming out from the boiler is let out to the atmosphere, through

the Electrostatic precipitator (having an efficiency of 99.97%) where the dry

ash is collected and sent to silos keeping the environment clean. The ash

collected in silos is sent in bulkers/ closed trucks for cement manufacturing.

It is also used for manufacture of ash bricks in NTPC Unchahar.

PRODUCT DELIVERY

The quantity of electricity produced at any instant by Unchahar is as per

customer requirement and governed by a mechanism of declaring capability

for the next day generation and receiving schedules for the current date.

However, depending on the time specific demand on the Grid, Northern

Region Load Dispatch Centre (NRLDC) gives backing down/ normalization

of generation massages. The power generated is fed into the Northern grid.

The power so received by Northern grid is supplied to different states in the

northern region tied up with Unchahar station. With regard to the

commercial aspects, station commercial section provides all metering and

billing data to commercial section of Northern Region Head Quarters

(NRHQ) who in turn rise the bill and follow up with the NRLDC and state

concerned for realization of dues. The certification of generation of each

month, applicable tariff structure. Power quality and quantity related issues

are discussed in stakeholders meeting and commercial issues are taken up by

site Commercial department and NRHQ Commercial Departments with

customer representatives.

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RECYCLING

There is no reject in the product produced at Unchahar and hence does

warrant any recycling. However, Unchahar is strongly committed to

utilization of ash generated as a result of its process.The process design

provides for collection and storage of dry fly ash in silon on a continuous

basis. The promotional activities under ken and incentives provided by

Unchahar have enabled to continuously improve the fly ash utilization levels

to more then 100% since last two years.

Unchahar Performance

Stage – I GenerationGraph-9

Stage-II Generation (MU)Graph-10

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Financial year

MU

Financial year

STATION POWER LOAD FACTOR (PLF) %Graph-11

DSCMIT 100

%

Financial year

%

CHAPTER-4 Study of specific management problem

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SPECIFIC MANAGEMENT PROBLEM

Codification And Updation

Every equipment in the company which is being use like boilers, cylinder,

turbines etc. are having a code with 10 digits. Every machine or every

equipment is recognized by code, we can get all information and features of

any equipment through this code. This code was in use when the company

was incorporated but the features are being changed day by day for eg.

company was using computer when it started, the code was declared that

time, that time computer was having different features compare to this time

for eg. that time they were using Windos 98 software and this time they are

using Windos Xp and Windos Vista software, when we will open the code

that will give the information and features of old version because the code is

not updated. Due to this problem the company is facing a lot of problem.

Suggestion:

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A special team should be formed who should be assigned with the

job of updating the features (5 to 6 member).

Post coding system should be renewed and modern coding system

should be implemented.

Regular monitoring should be done by supervisor in order to see

whether updating is going properly or not.

An online system should be there so that on line processing should

be done or updation is going on or not.

Recommendation:

Management should take more responsibility in order to

make there process more effective.

An HR policy should be formed in order to make updation policy

more effective.

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CHAPTER-5

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BIBILOGRAPHY

BOOKS:

Philip Kotler “Marketing Management”.

Prasanna Chandra “Financial Management”.

Gaitther, N & Frazier, “Production & Operation”.

OTHER REFRENCES:

Library of NTPC Unchahar

Brochures

WEBSITES:

http://www.ntpc.co.in

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