SITUATION BASED PROBLEM SOLVING

NTPC, BANGLADESH

Submitted by

RAHUL SETHI

11907407

MBA

Lovely Professional University

Phagwara, Punjab

Under the supervision of

Dr. SHEETAL
 INTRODUCTION

NTPC stands for National Thermal Power Plant Corporation Ltd. It is an Indian Public
sector undertaking engaged in business of electricity generation and distribution, Natural
Gas explosion, Production, Transportation and distribution. It is located at Rampal in
Bhagerat district of Khulna division, Bangladesh, 14 km away from one of the largest
mangrove forest of world, the Sundarban, which is a UNESCO world heritage site. The
joint venture agreement between NTPC and BPDB was signed on January 29, 2012.It
was incorporated under the companies Act 1956. Three organizations were involved in
the functioning of the plant.

1- Bangladesh Power Development Board(BPDB)

2- Bangladesh-India Friendship Power Company Ltd.
3- National Thermal Power Corporation

It is Joint Venture between India and Bangladesh to increase friendship between two
nations and to provide job opportunities and electricity to Bangladesh region. It is 50:50
Joint venture between NTPC Ltd. and Bangladesh Power Development Board. It is a
thermal plant having capacity to produce 1320MW. It is basically a Coal based thermal
power plant. It was in 1834 acres of land. It was financed by Indian Exim Bank.
Bangladesh-India Friendship Power Company Ltd. has appointed the Indian construction
company Bharat Heavy Electricals Ltd. for the construction of the plant.

EXPANSION PLAN

The installed power capacity of Bangladesh is 12,339 Mw, of which coal-based plants
comprise only 250 Mw or about two per cent. By that country's Power System Master
Plan, 2010, the demand in 2030 will be about 30,000 Mw and installed capacity is
targeted to reach 40,000 Mw. Of this, coal-based generation capacity is expected to be
15,000M.W. NTPC, which has a 17% share in India’s power generation capacity of
255,012.79 megawatts (MW), has to play an important role. The utility plans to add
14,038MW in 2012-17 and has an ambitious capital expenditure target of ₹ 1.5 trillion. It
has set itself the target of becoming a 128,000 MW power producer by 2032. Further
company has commercially announced its first Hydro Power Plant at Koldam, Himachal
Pradesh. Company has further plans to reduce its fossil fuel consumption capacity. NTPC
also planned to go global by signing a contract with Sri lanka for setting up 500 M.W.
coal based plant.

COMPETITORS

Tata Power- Tata power is an Indian electric company based in Mumbai, Maharashtra. It
is a part of the Tata Group. CEO and MD of the company is Praveer Sinha. It is the
largest private player in the power sector with a generating capacity of over 4600 M.W.
which is 20% of total power generation capacity of the private sector in India, and 2% of
total capacity. Adani Power- Adani Power Ltd. is the power business subsidiary of Indian
conglomerate Adani Group. Its head office is in Ahmadabad. CEO and MD of Adani
power is Gautam Adani. The company is India’s largest private thermal power producer
with capacity of 12,140 M.W. Adani Power was placed at 95th rank among top 100
companies listed in best companies for C.S.R 2014 study. Reliance Power:- Reliance
Energy Generation Ltd is a part of Reliance Anil Dhirubhai Ambani Group. It was
established to develop, construct, operate and maintain power projects in the Indian and
international markets. Reliance power has 50 subsidiaries. R-Power was ranked as
the 124th largest corporation in India with 9th rank in 'Power sector' category. Chairman
of the company is Anil Ambani. Raja Gopal Krotthapalli is the CEO of company.

PESTLE ANALYSIS

PESTLE stands for

P- Political

E- Economic

S- Social

T- Technological

L- Legal

E- Environmental
PESTLE analysis is a tool which is used to study the current political, economic, social,
technological, environmental, legal issues or problems faced by an organization .
PESTLE analysis is an important analysis for an organization to bring new updates in the
planning and implementation process.

 POLITICAL FACTORS:

The production of plant was challenged by the Bangladesh High Court. It made a
statement that a coal based power plant must be 15km away from the living population
and as well as from the Sunderbans mangrove forest as it is a world heritage site declared
by UNESCO.

The National Committee on Protection of Oil, Gas, Mineral Resources, and Power-Port,
environmentalist groups and bodies of the left-leaning parties and general people of
Bangladesh vowed to resist the planned inauguration of the Rampal Power Plant
scheduled on 22 October 2013

On 18 January 2017 in the 47th Annual meeting former vice president of United States AI
Gore has requested prime minister of Bangladesh Sheikh Hasina to withdraw the project
and not to introduce industrialization in the Sundarbans forest area .

Prime Minister Modi is also getting letters of suggestion to withdraw the Rampal coal
based power plant.

 Reply of the Government

The govt. of Bangladesh called all the allegations made on the coal based power plant
doesn’t make any sense. The advisory of Bangladesh prime minister said that the power
plant will make a negligible effects on the forest area. They said that there will be a
control over the emission of the green house gasses. The level of the gasses should be
kept minimum. Further the company has decided to make a 275M high chimney for the
emission of gasses.

 ECONOMIC FACTORS:

The economic factors played an important role in running the plant. NTPC has to face
problems to get financial help from overseas. According to U.S. Exim bank the project is
no worth for financing. U.S. John Coequyt, Sierra Club's global climate policy
director made a statement that financing any coal project is unnecessary. As it is near the
Sundarbans forest and it will face a lot of allegations and opposition in the coming time.
Due to delays in funding process construction was also delayed. The equity share of India
and Bangladesh was 50:50. So Bangladesh get a loan of U.S$ 1.5 billion with the help of
National Thermal Power Corporation. According to sources the joint venture company
will enjoy a 15 year tax holiday. This tax exemption was for transport of machinery and
equipment for BHEL, maintenance dredging(A water cleaning process) to be paid for by
the Bangladeshi government, inadequate compensation to landowners, and subsidies
through Exim Bank of India’s heavily discounted loan. After the oil spill incident in
Shela river the Norwegian Pension fund refused ti fund(It is also known as Oil fund , It
has an asset of U.S.$ 1 trillion and Bangladesh was excluded on the ethical grounds).
The total financial support provided by Indian Exim bank reached upto U.S. $9.46 billion
dollars. It was found that production rate was 32% more even after the heavy subsidies.

 SOCIAL FACTORS

The plant set up in Bangladesh violates the environmental guidelines as the setup should
be 25 km away from the living diversity.

The proposed 1,320MW power plant project (consisting of two generating units of
660MW) will cause damage to the livelihoods of two million dependent on the
Sundarbans. Most of them were dependent on agriculture, shrimp cultivation, and fishing
but also wood, and palm collecting. All these livelihoods are at a risk as the support
infrastructure of the Rampal power plant has already been built.
 The most deadly impact will be on fisheries. The plant will discharge toxic water in
the Passur River, and oil and chemical wastes from coal-carrying vessels will also
pollute the water.
 In total, 95 percent of the land acquired is agricultural land. The production of
crop will decrease since fertility will reduce rapidly as a result of coal related
pollution. The air, odor and sound pollution will affect local inhabitants and cattle so
badly that it will be barely possible for people to live and cultivate. Inhabitants'
health is also affected by it.
After the news roll out people living in that area with others started opposing the plant
which further creates hindrance in the company functioning and transportation facility.

 TECHNOLOGICAL FACTORS:

Technological factors play an important role in the coal consumption process and
power generating. If the technology is not latest it may effect the cost production and
amount of electricity produce. High prices of petroleum products in international
market has increased electricity generation costs in oil-fired power plants substantially
resulting in slowing of generation in oil-fired power plants. One fourth of the
generation plants of the power system are more than 20 years old causing higher
maintenance costs and plant outage. Lack of inspection, funds and regular
maintenance leads to break down maintenance and lower efficiency. To cope up with
the government regulations NTPC Bangladesh is not using local coal for production
of energy as it emits more poisonous gasses and create more pollution as compare to
the imported one. The coal was imported from South Africa and Australia.

 ENVIRONMENTAL FACTORS:

The environmental factors have the most effect on NTPC Bangladesh because the
plant setup was between the ranges of 14km from the living population of
Bangladesh. It violates the environmental guidelines. The most of the effects were
negative and irreversible. It is seen that climate, topography, land use pattern, air and
water (both surface and ground) quality, wetlands, floral and faunal diversity, capture
fisheries and tourism will be affected permanently due to the proposed coal fired
power plant. Increase in water logging conditions, river erosion, noise pollution and
health hazards; decrease of ground water table; loss of culture fisheries, social forestry
and major destruction of agriculture will be the expected consequences of the Rampal
coal-fired power plant. The plant emits poisonous gasses which is harmful for the
people living in the nearby areas. The toxic wastes of the plant is disposed into the
rivers which will affect the fertility, animals, peoples as well as the rare dolphin breed
which was found in the rivers of Sundarbans.Various accidents happened which had
effected the forest and peoples badly some were

An oil tanker spills 350 tones of oil into Shela river. Six months later a vessel sank in
Bhola river which contains toxic fertilizers, later on two vessels containing 510 and
1235 tones collapsed in Passur and Shela river respectively. These incidents create
more opposition for plant startup. These incidents effects the wildlife, people and
global environment.

 LEGAL FACTORS

NTPC has to run its plants according to the norms setup by the various legal
institutions.

 Bangladesh Wild Life Preservation Act- As the cultural and natural heritage
sights are threatened to destruction by social economic conditions, So
considering the threat this act was made which main motive was that it will
maintain, increase, and diffuse knowledge, by assuring the conservation and
protection of the world's heritage, and recommending to the nations concerned
the necessary international conventions,
 Constitution of Bangladesh- So norms were made by the government itself to
safe the environment and to protect the heritage sites.
 a) Convention on Wetlands of International Importance
b) Equator Principles
c) Policy, Law and Administration for Protected Area Management in
Bangladesh
d) Technical EIA Guidance Manual for Thermal Power Plants
e) UNESCO World Heritage Convention

So every plant has to check that there plant manufactures should not be violating any
term article or law which are given by these legal institutions and which were
mandatory to follow. They have to consider various laws like Employment Law,
Consumer Protection, Health and Safety Regulations, Tax Regulation etc.

LATEST NEWS
1-Bangladesh has signed an agreement to buy 718 M.W. from Reliance Power over the
next 22 years. Reliance is going to invest $1 billion to set up plant by 2022 to provide
electricity. The plant will be setup over 20 km south east of capital Dhaka . The plant will
be fully owned by Reliance. The source of production will be fueled by gas and
regasification liquefied natural gas.

2-Bangladesh also signed a deal with China for building renewable energy project to
provide 500 M.W. by 2023. Cost of the investment will be $400 million.

3-Indonesian firm to export coal to Bangladesh to diversify fuel mix in the electricity
generation. This is the first agreement for coal imports. About 40lakhs of tones is
required per annum to run the plant.

4-NTPC on Modernization Drive- NTPC is going to modernize the people policies. A

work from home option is now available for middle and senior level executives who are
manning commercial functions. It will help the executives to better work-life balance.
PSU(Public Sector Undertaking) is encouraging a environment in which the use of paper
is eliminated or reduced by converting documents into digital form. It will boost
productivity, making and sharing of documents easier and will decrease the burden on
environment.

STRATEGIC SOLUTIONS
Plant processes should not harm the local life and forest area. Plant had to take measure
to avoid such kind of situations. Plant should provide employment to the local
inhabitants. They had to take measures to minimize the waste. The water which will be
disposed in rivers should be treated or filtered before disposing so that it will not affect
the rare fish species living in the water. Plant had to acquire the latest technology which
will decrease the maintenance cost, fuel cost, and it lead to increase in the power
generation. Renewable energy sources should be used where possible. There should be
filtration of smoke before it emits out of chimney. Plant has to take care of the norms of
UNESCO as the plant is situated near the world heritage site. If the plant is not working
under the norms as per UNESCO it may face oppositions at international level as we can
see the same case with Russia. As Amazon forest was on fire on 29 August it affected the
relationship of Russia with its trading countries. ENGOs (Environment non-government
organizations ) blame Russia and made a statement that this happens because Russia had
weaken its policies towards environment protection. Because of this it had to face a fall in
exports of leather. So plant should be operated at minimum level of pollution so that it do
not had to face any kind of allegations which will hinder their smooth processing.

REFERENCES
https://www.thedailystar.net/city/us-exim-bank-urged-refrain-financing-1247995

https://www.theguardian.com/environment/2014/dec/11/bangladesh-oil-spill-threatens-rare-
dolphins

https://timesofindia.indiatimes.com/city/trichy/boiler-components-dispatched-for-bhels-
ovserseas-project/articleshow/62677163.cms

https://www.huffpost.com/entry/bangladesh-power-plant-st_b_3983560

https://www.thejakartapost.com/news/2019/06/19/indonesian-firm-to-export-coal-to-
bangladesh.html