Arup Roy Choudhury, Chairman and Managing Director of National Thermal Power Company, will soon complete half a decade as the head of India’s largest power utility. “NTPC has changed totally. The sense of belonging has now increased,” he says in an interview to Ketan Tanna.
You will be completing five years as the Chairman and Managing Director of NTPC. How do you evaluate your tenure?
Arup Roy Choudhury: We are looking at the one most dynamic sector (Power) in the Indian industry. The entire sector has changed. When I joined the NTPC, I made a courtesy call to the then Cabinet Secretary. The main trust was on capacity addition and how to build on the capacity without depending on Coal India.
It was then growing at 1% (and now the growth rate is 7%). But soon, the coal prices headed north because of China. Then we decided to focus on our own domestic coal resources. How to improve the performance of Coal India became the thrust. That thrust has now borne fruit. It has been quite a good last quarter. But we need to keep up the tempo.
Remember, it has still not solved our problem. At that time, we were talking of coal regulator which is yet to materialize. Therefore, coal prices are sometimes such that the cost of power is becoming unaffordable to the Discoms. Five years ago, Discoms were not a worry.
What was happening was that states were borrowing money from the banks and the banks in return were comfortable lending money because of state guarantee and so on. The money was being borrowed against their Gencoms and was being misappropriated towards meeting the gaps of their Discoms. We are a democracy and will remain one. There will be coalitions, political compulsions will remain. Power will remain a concurrent subject and we have to navigate through all of this.
Q) So what is the situation now (of power sector)?
A) After five years, generation capacity has matured in India. Coal generation to a certain extent has picked up. But our plants are running at very low PLF (Plant Load Factor). So the thrust is how to improve Discoms. The thrust now is different compared to when I joined NTPC five years ago.
Q) What has been your milestone at NTPC?
A) If you look at the country, the kind of capacity addition we have done, it is phenomenal. When I joined it was 32,000 MW and now it is 45,000 MW in NTPC.
Q) When you joined NTPC, you were an outsider, you were a civil engineer and not from the power industry. How did that affect you?
A) It made a very positive impact. One had the liberty to think differently. One never thought the way the organization had been thinking for 35 years or so. One could take decisions for the company that were totally radical and aligned to the market. Therefore, one could identify the need easily and not get bogged down by the fact that we were adding on average of 1000 MW a year, and how we could increase it to 3500-4000 MW. For one or two years, there was an apprehension. Secondly, there was the cost of machines. We were so used to buying BHEL machines and were paying Rs 6-7 crores per MW. Now we pay Rs 4 crores. We are laying out a plant of 2000 MW in 550 acres instead of 2000 acres. All these changes have come about because I am an outsider.
It is a big challenge in the next decade or so. We are going in for extensive use of green technology. In 25 years, NTPC will generate energy through a huge mix of coal, hydro and environment friendly resources. Cost of energy will reduce. NTPC will have cheapest power cost which nobody can match. NTPC’s Plant Load Factor (PLF) will get delinked from other companies. We are working for a better tomorrow.
Q) As an outsider to NTPC, how did you manage?
A) Please remember, I was not running an organization for the first time. For nine and half years, I ran another organization too. In any organization, there is a gentry that resists change. But there is also another crowed which wants change as they have seen stagnation. On a personal level,it was a fantastic connect as I did not know anybody. I judged the person by his performance and what he/she gave to me. There were no old cupboards to close or to open. Therefore, people who could deliver within the public sector were sought. That gave a signal to others. The third thing was that because I was also from private sector and had turned around a company. The concept that time is money was not (an issue) in public sector, One could go home comfortably without carrying any headache home. That concept has changed too. Now everybody is 24x7and carrying their headache home, thinking about how to solve their problems.
NTPC was a basically run from the corporate level by a handful of 4-10 persons. The whole thing has changed. It started running from the station, from projects, from regions. So instead of 4-10 persons, now 36 persons stated running the company. Everybody wanted to do his or her bit. NTPC has changed totally. The sense of belonging has now increased.
Q) How did you tackle obstacles from entrenched interests?
A) If we take away powers, people do feel little uncomfortable.
Q) What was your strategy?
A) Fortunately, in both public and private sector, the chairman has immense powers. Some of my colleagues lament that we are bogged down by government rules and regulations. I disagree. You can do what you want. The government might not be happy sometimes. There are times, when the government has been unhappy because of my blunt talk. But I have never felt that anybody has pulled me up. I have been delivering results constantly. It is something that has been recognized by everybody.
After all, the government is a Lala. The government is looking at the company is doing. Top 10, Mahatratna etc. How much it invested? How much is the company making? If the government has invested Rs 6000 crores and company has paid back 66,000 crores, how much better can it get?
Q) NTPC recently posted a drop of about 3 per cent in standalone profit at Rs 2,135.35 crore for the quarter ended June 2015?
A) Yes, mainly on account of low demand of electricity. The entire country is going through low PLF. Even Discoms have problems. Overall, we will make up. But next quarter will be better. We will make up in the last two quarters.
Q) You recently received the Lifetime Achievement Award at the India Pride Awards Function from Shri Arun Jaitley.
A) That was a great feeling (smiles). Coming from person like Mr. Jaitley, it meant a lot to me. It was a great thing.
Q) Why? Is it because he is number two in the Indian government?
A) Not, it is not the question of number two. Jaitelyji is driving the finances and the economy of the country. Yes, the Prime Minister gives direction but Jaitleyji implements it. If he (Jaitleyji) felt that I deserved an award, then it is very important and means a lot to me.
Q) Lifetime Award means pack up time?
A) Yes some say that (Laughs). But believe me for 15 years now, it has been hard work. But one has to walk into sunset one day or the other. There are other things I want to do in life. I want to write, research, and teach. Many other things. I have written one book. I will write another. I want to do lot many things.
Q) What are the future plans for NTPC say in next half decade or so ?
A) It is a big challenge in next decade or so. We are going in for extensive use of green technology. In 25 years, NTPC will generate energy through a huge mix of coal, hydro and environment friendly resources. Cost of energy will reduce. NTPC will have cheapest power cost which nobody can match. NTPC’s Plant Load Factor (PLF) will get delinked from other companies. We are working for a better tomorrow.
Q) So time for retirement post 60 years?
A) After 60, whether I am working in the same manner, responsible for performance, financial results,investors etc. I have not thought about it. I am not sure. I don’t think I would like that. It is not for money now. I want to give back to the society.
Q) You play the guitar?
A) Yes, I do a lot of things. And want to continue doing it.
Q) On a personal level, you have talked about your role model Mohanananda Brahmachari. Tell me about him? And what have you learnt from him?
A) He was my anchor, my Guruji and I have learnt everything from him. Even without speaking to him, if I went, he would understand problems. He was a firm believer of Sankalpa Shuddha. That means whatever you want to do, if you heart and thought are pure, it will happen. People would go up to him and say Baba I want this and that. Baba would not say yes ho jayega. He would say if you want from the depth of your heart, it will happen but the intention has to be pure. Many people achieved what they wanted (after meeting Baba). He got you focused about your goal and work towards it.
Dr. Arup Roy Choudhury studied at the prestigious St. Xavier and St. Michael’s School at Patna from where he went to the then best engineering college in Bihar – Birla Institute of Technology, Mesra (now in Jharkhand). He has done his post graduation and doctorate from IIT-Delhi.
After working with DLF, DR. Choudhury was selected by the Government to head National Building Constructions Co. Ltd. (NBCC), A Government of India Enterprise. Becoming the youngest CEO of a CPSE (NBCC) at the age of 44 years, he worked towards what turned out to be a stunning turnaround story. He transformed NBCC, which was a sick company with negative net-worth and salary backlog in 2001, into a blue-chip enterprise having ‘Schedule A’ and ‘Navratna’ status bestowed upon it by the Government of India.
The transformational turnaround of the Company enabled NBCC’s turnover grow about 10 times and net-worth over 500 times during his tenure of nine-and-a-half years at the helm.
Later, Dr. Choudhury joined NTPC as CMD in September, 2010 and since then the Company has achieved several commendable milestones, which include:
In addition to his contributions as CMD of NBCC and NTPC, Dr. Choudhury led Standing Conference of Public Enterprises (SCOPE) – the apex forum of over 200 Central Public Sector Enterprises (CPSEs) – for two consecutive terms of two years each (From April 2009 to March 2013), as its Chairman. He effectively led policy advocacy for greater empowerment of these enterprises.
Dr. Choudhury has authored the book ‘Management by Idiots’ and has been bestowed upon several national and international awards.
