NHPC Ltd, country’s largest hydel power player with a generation capacity of 5,702 MW, has been running without a full-time CMD since January 2011. R. S. T. Sai, CMD, THDC India Ltd has been given the additional charge of CMD of the PSU major since June this year. The impact of vacuum at the top is visible in terms of declining profits and delayed project execution.

Look at the financial performance of the company. Net profit of the company has gone down from Rs. 2,771 crore in 2011-12 to Rs. 978 crore in 2013-14. The company had issued shares to the public at Rs 36 per share and its share price is currently hovering around Rs 20, thus causing immense value erosion to its investors. Further, absence of decision making at the top has resulted in many projects getting unduly delayed. For example, works of Lower Subansiri Project are stopped since December, 2011. Contractual issues in Parbati-II project resulted in stoppage of work which could be resolved only recently.

Financial performance of NHPC (figures in crore rupees)

Quarter ending June
Quarter ending June
Revenue 5654.69 5306.64 5537.04 2054.85 1619.37
Net Profit 2771.77 2348.22 978.79 616.03 719.93

Even Parliamentary Standing Committee on Power has pointed out that the continuous vacancy at the level of CMD in the organization has resulted in poor performance of NHPC in capacity addition programmes. As per the existing rules, the process/action for filling up the post of CMD is required to be initiated at least two years in advance of the anticipated vacancy. But, in case of NHPC even after nearly four years of vacancy the issue of appointing a CMD is muddled in vigilance issues and court battles. And the new Power Minister just shrugs off his responsibility by calling it a legacy inherited from the previous government.

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