CORPORATE PLAN OF NTPC

By S.N.TRIPATHI

PRESENTATION OUTLINE

PLANNING PROCESS ADOPTED BY NTPC

15 YEAR CORPORATE PLAN (2002-2017)

PLANNING PROCESS ADOPTED BY NTPC

Present Structure and Functions of CP

The Corporate Planning deptt. was set up immediately after the formation of NTPC in 1975.

CMD
E.D. (CP)

With the growth of NTPC and changing business environment, the functions and structure of the department has been undergoing periodic changes to meet the new requirements

DISHA

New Projects

Strategic Planning
Corporate Plan 5 year Business Plans Environment Scanning Policy Advocacy ECM/MCM External MOUs Internal MOUs

Corporate Affairs
Interfacing with MOP QPR Parliamentary Committees Foreign Deputations VIP References Presentations on NTPC Reports, Writeup Navratna review

WEC-IMC Secretariat
Single window for WEC-IMC activities Coordination cell for Awards & Rewards for Excellence (CARE) *

Implementation of Project Disha Recommendatio ns

Single Window for all New Projects (including hydro) Coordination with Powegrid Multilateral funding Annual Plans

In addition PQs and VIP visits are handled on rotation basis

*Reporting
directly to D(HR)

Key to success of Planning Process The success of the planning process hinges on:
vision of the CEO in setting the right destination,

Currently where we are?

How do we reach our destination? (Strategic Planning)

The Planning Processes

Involving right people having right skills in the planning Where do we process, want to reach? (our Using right forecasting destination) models/tools

Integrating implementation mechanism with the planning process

Providing warning signals at right time to facilitate timely corrections to the Plan

Planning Model used by NTPC for formulating its Corporate Plan

Vision, Mission, Values and Objectives
Past Performance Appraisal Business Environment Appraisal

Strengths and Weaknesses

Opportunities and Threats

Business Portfolio and Functional Strategies

Capacity Addition scenarios

Inputs from Project Disha recommendations finalised after intensive discussions

Financial Modeling for next 15 years to determine availability of funds

Plan implementation Strategies

NTPC follows a collaborative approach to formulate its Corporate Plan. For finalising Corporate Plan (2002 to 2017), inputs obtained during project Disha (ORGANISATION TRANSFORMATION STUDY) were widely used.
Key organisational issues Validation of findings
Top Management 125 sessions 12 plants Over 600 people met Project-Team 900 meetings

30 sessions

Plants and regional office 12 different plants covered during various phases Presentation made in NBC at Manesar Presentations made to NEFI also

Corporate and ROs

Scope, EOC, R&D, PMI, WRO, NRO Information gathering, discussion on data analysis and findings

External stakeholders Customers Regulator Ministry of Power Planning Commission CEA Lending institutions Suppliers Industry Players

TIME FRAME OF NTPC CORPORATE PLAN

In view of long gestation period from concept to commissioning of power projects, NTPC follows a 15 years planning cycle for formulating its Corporate Plan The first corporate plan was approved by NTPC for the period 1985-2000. Post 1991, the economic and power sector environment started witnessing rapid changes due to which business case assumptions made in first Corporate Plan became largely invalid:
Several projects identified by NTPC in its corporate plan were shifted to IPPs The realization of dues assumed serious concern, resulting in paucity of investible funds. Moreover, the world bank, indicated that it would be averse to giving more funds to the company unless it brought down its outstanding receipts to less than 2 months of receivables. The government stopped budgetary support Transmission business transferred to Power Grid in 1991.

In view of the above fundamental and rapid changes taking place in the business environment, it was decided that the while the First Corporate Plan needs to be revised, the planning philosophy also need to be modified. The second Corporate Plan: looking ahead (1997-2012), approved by NTPC board in July 1998 envisaged 5 year rolling planning concept. While the Plan was made for 15 years, it was a detailed Plan for the first 5 years and only directional plan for next 10 years. It was also approved that every five year the Plan would be rolled for next 15 years In line with the new planning philosophy, third Corporate plan for the period 2002-2017 has been approved by NTPC Board in July 2003.

PLANNING PROCESS ADOPTED BY NTPC 15 YEAR CORPORATE PLAN (2002-2017)

Sections of the Corporate Plan

Section 1: The Corporate Agenda (Vision, Mission, Objectives, Values) Section 2: Review of Past Performance Section 3: Changing Business Environment and Expected Future Trends Section 4: Business Portfolio Section 5: Functional Strategies Section 6: Plan Implementation Strategies

 Section 1: The Corporate Agenda (Vision, Mission, Objectives, Values) Section 2: Review of Past Performance Section 3: Changing Business Environment and Expected Future Trends Section 4: Business Portfolio Section 5: Functional Strategies Section 6: Plan Implementation Strategies

The Corporate Plan of NTPC has been aligned with the Vision and Mission of NTPC and is built upon eight pillars Vision
A world class integrated power major, powering Indias growth, with increasing global presence

Mission
Sustainable Power Development

Business portfolio growth

Financial soundness

Customer focus

Agile corporation

Performance leadership

Human Resource Development

Research & Development

Objectives

Redefined Mission
Make available reliable and quality power in increasingly large quantities at competitive prices and ensure timely realisation of revenues Adopt a broad based capacity portfolio including hydro power, LNG, nuclear power, and non-conventional and eco-friendly fuels Plan and speedily implement power projects using state-of-the-art technologies Be an integrated utility by implementing strategic diversifications 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 developmental efforts in the Indian power sector including assisting state utility reform, policy advocacy etc Be a socially responsible corporate entity with thrust on environment protection, ash utilisation, community development, and energy conservation

Objectives

 Section 1: The Corporate Agenda (Vision, Mission, Objectives, Values)

Section 2: Review of Past Performance

Section 3: Changing Business Environment and Expected Future Trends Section 4: Business Portfolio Section 5: Functional Strategies Section 6: Plan Implementation Strategies

GLOBAL STATURE
NTPC ranks sixth among the top ten global thermal generators
TWH 2001
600 500 400 300

501

175
200 100 0

152

146

141

133

128

126

102

94

TP C

IT A)

AP )

U S)

AF )

Co (U S)

(U S)

(U S)

KR

(R

EL (

TV A

AE P

-U ES

ES KO

KE PC

So ut he r

TE PC

EN

AO

Source: A.T. Kearney

W E

(G ER

(S

(S

(J

POWERFUL PERFORMANCE IN PROJECT EXECUTION

Reducing Project Completion Time

RSTPP-III 2003 Talcher- II 2002 Simhadri Vindhyachal-2 1999 Singrauli

1986
0 10 20 30

Vindh-3 2004

38 37 38 39 48

59

40

50

60

500 MW UNIT Main Plant Award to Syn (months)

Impressive financial performance

Rs. Crores
25000
TURNOVER

20000 15000 10000

INT. RESOURCES PROFIT

Rs. 18871.2 Cr.

Rs. 7283.94
5000

Rs. 5260.78
0 9192 9293 9394 9495 9596 9697 9798 9899 9900 0001 20 0102 20 0203 20 0304

Years

COMMERCIAL PERFORMANCE
89.60% 76.70% 100.00% 100.00%

100 90 80 70 60 50 40 30 20 10 0

89.8%

92.30%

1996-97

2000-01

2001-02

2002-03

2003-04

2004-05

Realisation of Current Dues (%)

HRM initiatives undertaken by NTPC have translated into significant productivity gains

MUs
8 7 6 5 4 3 2 1 0 1996-97 4.63

GENERATION PER EMPLOYEE

7.11 6.11 6.26 6.58 7.43

2000-01

2001-02

2002-03

2003-04

2004-05

Years

Man-Mw Ratio Over the Years

1.4 1.2 1 0.8 0.6 0.4 0.2 0
1.27* 1.10*
0.56 0.49 0.47 0.46 0.41 0.38

1.07*

1.02*

0.98*

0.91*

Man-Mw Ratio

0.71

0.61

0.6

0.56

0.57

0.53

1996- 2000- 2001- 2002- 2003- 200497 01 02 03 04 05 O&M Non-O&M

Year

*Total (O&M and Non-O&M) Man MW Ratio excluding Badarpur and JVs/Subsidiaries

Turnover/Employee

Rs. Lacs
120 100 80 60 40 20 0 1996-97 2000-01 2001-02 2002-03 2003-04

105.07 89.46 84.00 89.48 89.90

45.96

2004-05

Year

PROFIT PER EMPLOYEE

Rs. Lacs

30
25.09

27.11

25 20 15 10 5 0
1996-97 2000-01 2001-02 2002-03 2003-04 2004-05

17.54

16.63

16.85

7.85

Year

Turnaround Capability
Achieved turn-around in performance of stations taken over from State Electricity Boards through application of and strict adherence to well laid down Management and Operation and Maintenance principles.

Station

Taken-over on

PLF(%) Prior to Takeover 14.90 18.70 18.02 31.94

PLF(%) During 2003-04 75.32 67.78 87.43 87.67

PLF(%) During 2004-05 86.07 79.33 92.15 88.45

Tanda Talcher Unchahar Badarpur

January 2000 June 1995 February 1992 April 1978 *

*BADARPUR TPS at DELHI is owned by GOI and is managed by NTPC

since APRIL78.

Continuous Excellent rating under MOU

NTPC

has

achieved rating

targets under

for the

EXCELLENT

Memorandum of Understanding (MOU) signed with GOI for all the EIGHTEEN (18) years up to 2004-05 since inception of the MOU system.

Acclaim from World Bank

NTPC IS THE SINGLE LARGEST BENEFICIARY OF WORLD BANK FUNDING (US$ 4 Bln.) World Bank Presidents speech at Singrauli in August 1985
You are on time; you are within budget and you are generating

profits. These are all phenomena and characteristics that the World Bank likes to be associated with.

Performance Audit Report : 1993

NTPC has demonstrated that Government owned power

utilities can be operated at efficiency levels comparable to those of privately owned utilities in India and well run utilities outside of India.

Implementation Completion Report : 2000 (WB LOAN 3632-IN) NTPC is a mature utility and has demonstrated that it can

achieve technical performance parameters comparable with those achieved elsewhere in the world. It has developed a corporate culture based on professional pride of doing things well through a highly motivated staff. NTPC has grown and developed over the course of this investment into a power producer of international repute and a potential force for

GROWTH PLANS AS ENVISAGED IN THE CORPORATE PLAN : LOOKING AHEAD (1997-2012) ARE ON THE CHARTED TRACK

Multi-pronged Growth Strategy

Capacity Addition

Diversification

Consultancy Services

Greenfield Projects Expansion Projects Takeovers Joint Ventures

R&M LNG

Domestic International

Hydel

As laid down in Looking Ahead, NTPC is surging ahead to become a 50,000 MW plus Company by 2012

As envisaged in Corporate Plan Looking ahead-2012 NTPC has diversified into various related areas and is launching new initiatives for ensuring growth
LATERAL INTEGRATION (Hydro projects, Small Hydel)

FORWARD INTEGRATION (Distribution business, Power trading)

BACKWARD INTEGRATION (Captive mining of coal, Coal washery, Sourcing of LNG)

DIVERSIFICATION (JVs & strategic alliances)

Key Strengths
Largest market share in domestic power generation and a broad customer portfolio across the country Excellent track record of performance in project implementation and plant operations Diversified thermal generation portfolio multiple sizes and fuel types Highly skilled and experienced human resources, exposed to state-of-the-art technologies in project execution and power generation Navaratna status High brand equity among stakeholders Strong balance sheet ability to raise low cost debt Engineering skills in project configuration and package design Turnaround ability for old plants demonstrated in the takeover plants of Talcher, Tanda and Unchahar High credit rating that is indicative of the confidence of lenders Established systems and procedures to institutionalise excellence in business operations received ISO accreditation in several functions/areas In-house training facility (PMI), CENPEEP, R&D, etc that assists in development of the sector Thrust on reducing social costs of capacity growth strong execution of Resettlement and Rehabilitation plans

Key Weaknesses
Low risk-diversification of business portfolio: Consists primarily of generation assets Functional orientation hampering cross-functional perspective in decision making Long and multi layered procurement process leading to long lead times and process delays Fragmented IT architecture Gaps in HR systems such as performance management, rewards and incentives and career development Inadequate deployment of a strong knowledge management system that could assist in improving efficiency and effectiveness in all aspects of the business Hierarchy for decision making that affects responsiveness Role ambiguity and dilution within different levels of the organisation
Strategies to address most of these weaknesses have been drawn up as a part of Project Disha. These have been included in the relevant sections of the Corporate Plan

 Section 1: The Corporate Agenda (Vision, Mission, Objectives, Values) Section 2: Review of Past Performance Section 3: Changing Business Environment and Expected Future Trends (Opportunities and Threats) Section 4: Business Portfolio Section 5: Functional Strategies Section 6: Plan Implementation Strategies

The changing business environment was studied to identify the imperatives for NTPC
Key analysis carried out Studied the emerging regulatory and policy environment
Key changes in policies reviewed Imperatives for NTPC identified

Changing customer environment

Emerging customer environment and key reforms being carried out Scenarios for financial health of key customers were identified and imperatives for NTPC identified

Changing fuel scenario

Comprehensive model for assessing competitiveness of different fuels in various locations was developed Scenarios for availability and pricing of different fuels were developed Thermal fuel strategy for NTPC was developed

Alternate sources of power were studied. These include :

Hydro power Nuclear power Non-conventional sources e.g. solar, co-generation, wind Potential future sources such as Fuel cells etc.

Key Opportunities for NTPC

Expand generation capacities by putting up thermal and hydro capacities, maintaining the position of a dominant generating utility in the Indian power sector
Broad base fuel mix by considering imported coal, gas, domestic coal, nuclear power etc with a view to mitigate fuel risks and maintain long run competitiveness Lead the development and commercial deployment of non-conventional energy sources especially in the distributed generation mode Expand services for EPC, R&M and O&M activities in the domestic as well as international markets Backward integrate into fuel management to exercise greater control and understanding of supply economics Improve collections by trading, direct sale to bulk customers and active role in capacity allocation in new plants Execute increased number of power plants that classify for Mega Power Project status, thereby reducing the cost of projects and power generated Forward integrate into the distribution business in India

Key Threats to NTPC

Limited experience of operating in a truly liberalized environment with competition Limited experience of operating in an independently regulated system Delayed SEB reforms and continuing financial ill-health SERCs might mandate lower off take for slow-reforming states Redirecting power may be constrained by inter-regional connectivity Downward regulatory and competitive pressure on tariffs Possibility of issues of coal non-availability as coal supply agreements of CIL with the State Gencos and IPPs evolve Lower than expected availability of gas Stringent norms for approval of increase in capital costs for projects in event of time overrun Stringent norms for the utilisation of ash generated by power stations in the absence of adequate demand from user industries and due to the high cost of transportation of ash Stringent environmental norms in the future may add to the cost of generation Absence of an independent regulator for coal industry and the delay in private investments leading to the risk of low availability of coal in the future

 Section 1: The Corporate Agenda (Vision, Mission, Objectives, Values) Section 2: Review of Past Performance Section 3: Changing Business Environment and Expected Future Trends (Opportunities and Threats) Section 4: Business Portfolio Section 5: Functional Strategies Section 6: Plan Implementation Strategies

In order to set indicative targets for 2017, we have looked at three dimensions
Key Dimensions Key Elements
Domestic generation portfolio Business portfolio Coal mining and washeries Distribution and trading

Globalization
NTPC in 2017 Organization Corporate profile Ownership Turnover People Sectoral leadership

Leading sector developments

Technological leadership

Domestic Generation Portfolio

NTPC would have increased its geographical presence within India

NTPC would enhance its geographical presence by expanding into suitable locations
Pithead focus would continue for coal based power stations Increasing share of imported coal in the fuel mix would lead to coastal installations in the Southern and Western regions RNLG / Piped gas based plants would be concentrated along the coast and/or along the gas distribution infrastructure Hydro power plants would be concentrated in the Northern and Central regions with some installations in the South as well Nuclear power plants at strategic locations

In addition, NTPC would also have some generation capacities in international locations

Target for coal mining, washeries, distribution and trading businesses

Business
Coal mining

Target 2017
20 MTPA in operation 10-15 MTPA in development

Remarks
To be conducted on a JV/BOO basis and ramped up based on experience to 20 MTPA by 2017 (Operations of 5 MTPA by 2009 and 10 MTPA by 2012) In addition, 10-15 MTPA to be identified for production in the 13th plan period To be conducted on a JV/BOO basis Business limited to meeting statutory obligations The limitation of serving plants > 1000Km from pithead would be reviewed periodically based on the economics and prevailing policies NTPC to take a cautious approach to distribution Also analysis of other markets reveals that regulator might not allow generating company to have high interest in distribution Setting up a national power exchange Assuming about 10% of electricity in India to be traded in 2017 Limited to sub-transmission lines to transmit electricity to a few large bulk customers of NTPC power Investment of minimum 26 % in regassification terminal Consider investment in liquefaction terminal

Coal washeries

75% of NTPCs requirements

Distribution

~2,000 MW

Trading

25% share in traded energy ~35 BU by 2017 Linked to bulk customers Linked to sourcing RLNG

Transmission

RLNG

NTPC would have a significant proportion of its ownership held by the domestic and international investors
Upto 50% non government holding
Retail shareholders - India and international stock markets Institutional investors FIs, FIIs Employee participation

In view of NTPCs strategic importance in the domestic energy sector, participation from strategic investor is not envisaged in NTPC

Listed in the Indian stock markets

Amongst top five market capitalisation in domestic market

Listed on 2-3 leading international stock exchanges

A Fortune 500 company Respected Indian stock on international exchanges

NTPC group would have a turnover of over Rs. 1,400 Bn by 2017 Revenue computed at
Circa 2017: NTPC group revenues (in Rs. Bn)
1600

electricity tariff, not margins

1400

1200

1000

800

600

400

200

0 Sale to bulk customers Sale to state utilities Generation JV/Subs Distribution Coal mining and washery Technical services Trading Total

By 2017, NTPC would employ over 30,000 employees across different businesses including generation, distribution
Note: Rupee devaluation assumed at 4% p.a. Source : AT Kearney Analysis

In summary, NTPC would be a leading power utility in the world by 2017, in line with its current vision
NTPC in 2017 Fortune 500 company An Indian MNC with presence in many countries Diversified utility with multiple businesses Amongst top five market capitalisation in the Indian market Group turnover1 of over Rs. 1,400 Bn with 30000+ employees Setting benchmarks in project construction and availability and efficiency Have a strong research and technology base Loyal customer base in both bulk and retail supply Preferred employer A leading corporate citizen with a keen focus on executing its social responsibility
Note: 1) Includes revenues projected for NTPC JVs and Subsidiaries

 Section 1: The Corporate Agenda (Vision, Mission, Objectives, Values) Section 2: Review of Past Performance Section 3: Changing Business Environment and Expected Future Trends (Opportunities and Threats) Section 4: Business Portfolio Section 5: Functional Strategies Section 6: Plan Implementation Strategies

Detailed functional strategies have been provided in the Corporate Plan

Goals and Strategies have been detailed for the following functions
Services Marketing Engineering Project Management Operations Finance Commercial Human Resource Development Information Technology Research and Development Environment Ash Utilisation Resettlement & Rehabilitation Energy Conservation CENPEEP Corporate Communication

Goals and Strategies have been detailed for the following thrust areas

 Section 1: The Corporate Agenda (Vision, Mission, Objectives, Values) Section 2: Review of Past Performance Section 3: Changing Business Environment and Expected Future Trends (Opportunities and Threats) Section 4: Business Portfolio Section 5: Functional Strategies Section 6: Plan Implementation Strategies

Comprehensive business plans should serve as an integrating link between the corporate plan, annual budgets and internal MoU targets
0 Years 5 Years 10 Years 15 Years

Time Long term corporate plan

Strategic Link

Contents of Business Plan

5 yr Rolling business plan 1st yr firm plan MoU Targets

Y1 Y2 Y3 Y4 Y5

Operational Link

KPA

Annual Budgets
Y1 Y2 Y3 Y4 Y5

Strategic Plan Progress on overall business strategy capture of past performance against plan Strategic intent for next 5 years Operational Plan One year firm performance targets to be translated into internal MoU targets for that function/ division Growth and other key targets for five years Performance improvement plans Implementation plans and key implementation milestones Timing for new ventures

The business plans of all regions and corporate functions would be integrated into nine key business plans
Regions Profit Centers Engineering Consultancy PMI Subsidiaries CENPEEP Thrust Areas Ash Utilisation Environment Mgmt R&R Corporate Communication R&D Energy Conservation Corporate functions with resource impact Finance Commercial HR Other major corporate functions Corporate Planning OS CMG CC&M Fuel Management IT

Preparation of 9 Key Business Plans

1. 2. 3. Plan for Plant Operations Plan for New Capacity Addition Plan for Financial Resources (Financial and Commercial) Plan for Human Resources Plan for Profit Centers (Engineering, Consultancy, PMI, CENPEEP, subsidiaries) Plan for New Business Development Plan for Thrust Areas (Functions defined as thrust areas) Plan for Renovation and Modernization (Of NTPC stations) Plan for IT

4. 5.

6. 7.

8.

9.

Each business plan template consists of 5 key elements

Five key elements of the Business Plan
Targets Quantitative targets for key activities Specific targets for first year Projected targets for next 4 years Business Plan Summary Corporate plan summary Strategies for next 5 years Targets for first year

Interlinking within the elements

Strategic Projects / initiatives Strategic activities Timelines

Manpower requirements

Resource requirements Capital expenditure Revenue expenditure

Level wise Skill wise, wherever skill can be segregated

A cross-functional Pursuit team has been constituted for formulating business plans.
Structure of Planning implementation initiative (Business planning & Environment Scanning) Apex Council Sponsor Director [D(Pro)] Initiative Champion (ED CP) PT Leader AGM (CP) Disha Core Team: 1 NTPC, 2 ATK member

Cross functional pursuit team

CP, OS, NCR, HR, CC&M, Consultancy & JV, Engineering

Nodal / lead officers While the business planning process was detailed further from the Disha recommendations, the pursuit team invested significant time in developing templates to capture business outcomes

The draft business plan templates have been developed in a structured manner and includes first cut feedback from concerned functions
Approach for developing plan templates Corporate Plan and Disha recommendations A MOU: External, Internal Worksho p within the Pursuit team

Draft KPAs

Develop draft templates for different plan areas

Draft templates for different plan areas

Preliminary plans prepared in the past Budget Documents, Annual plan Inputs from concerned function

Subsequent steps included seeking feedback and inputs from concerned functions and piloting of some selected Business Plans prior to finalisation of the templates
Key steps in preparation of Business Plan templates A Develop draft templates for different plan areas Incorporate learnings from pilot phase in BP templates Feed back & inputs from concerned functions

Pilot selected Business Plans**

Incorporat e learnings from workshops

Process documentation* and communication

Business Plan templates ready for pilot phase

Finalised Business Plan templates

* In the form of a System Manual **HR, Operations, New Capacity Addition, Commercial, Engineering being piloted

The functional nature of the business plans is being driven by nodal points for each
business area through Regional EDs and Station GMs in a collaborative manner
L1 plans
Ops. Plan NCA Plan HR Plan AUD Plan Other Plans

Nodal points, supported by nodal officer

Region 1 Plan
AUD

L2 plans
NCA
Ops.

HR

Regional plans, to be signed by RED

@ Includes resources for @

deptts not covered in any functional plans

Station 1 Plan
AUD

Other

Station n Plan Station plans, to be signed by GM

AUD HR NCA Ops.

Other

L3 plans
NCA Ops.

HR

The annual progress measurement would follow a four step approach

Annual Review BPC would review progress of BP targets and Internal MoU targets Status inputs to be provided by nodal points to Corporate Planning Status of progress would also be a factor in determining BP targets for the subsequent years Mid-year Review Mid-year review by Corporate planning Exception reporting in ECM/MCM Quarterly Review Review by nodal points ReEDs review L2 plans Status report on progress from nodal points to Corporate Planning
Monthly Meetings Self-review by the Stations and CC functions Minutes by Station to ReEDs Emphasis on root-cause analysis and early warnings Course Correction Focus

Performance Evaluation Focus Annual Review Annual Review

Identify issues that require attention

Mid-year Review
I II

Quarterly Review
I II III IV

Early Warning Focus

Monthly Review
Apr. May. Jun. Jul. Aug. Sep Oct Nov. Dec. Jan. Feb. Mar

Thank you

Objectives

Objective 1 : Business Portfolio Growth

To further consolidate NTPCs position as the leading thermal power generation company in India and establish a presence in hydro power segment To broad base the generation mix by evaluating conventional and nonconventional sources of energy to ensure long run competitiveness and mitigate fuel risks To diversify across the power value chain in India by considering backward and forward integration into areas such as power trading, transmission, distribution, coal mining, coal beneficiation, etc To develop a portfolio of generation assets in international markets To establish a strong services brand in the domestic and international markets
Objective 2 : Customer Focus

To foster a collaborative style of working with customers, growing to be a preferred brand for supply of quality power To expand the relationship with existing customers by offering a bouquet of services in addition to supply of power e.g. trading, energy consulting, distribution consulting, management practices To expand the future customer portfolio through profitable diversification into downstream businesses, inter alia retail distribution and direct supply To ensure rapid commercial decision making, using customer specific information, with adequate concern for the interests of the customer

Objective 3 : Agile Corporation

To ensure effectiveness in business decisions and responsiveness to changes in the business environment by Adopting a portfolio approach to new business development Continuous and co-ordinated assessment of the business environment to identify and respond to opportunities and threats To develop a learning organisation having knowledge-based competitive edge in current and future businesses To effectively leverage Information Technology to ensure speedy decision making across the organisation
Objective 4 : Performance Leadership

To continuously improve on project execution time and cost in order to sustain long run competitiveness in generation To operate & maintain NTPC stations at par with the best-run utilities in the world with respect to availability, reliability, efficiency, productivity and costs To effectively leverage Information Technology to drive process efficiencies To aim for performance excellence in the diversification businesses To embed quality in all systems and processes

Objective 5 : Human Resource Development To enhance organisational performance by institutionalising an objective and open performance management system To align individual and organisational needs and develop business leaders by implementing a career development system To enhance commitment of employees by recognising and rewarding high performance To build and sustain a learning organisation of competent world-class professionals To institutionalise core values and create a culture of team-building, empowerment, equity, innovation and openness which would motivate employees and enable achievement of strategic objectives

Objective 6 : 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

Objective 7 : Sustainable Power Development

To contribute to sustainable power development by discharging corporate social responsibilities To lead the sector in the areas of resettlement and rehabilitation and environment protection including effective ash-utilisation, peripheral development and energy conservation practices To lead developmental efforts in the Indian power sector through efforts at policy advocacy, assisting customers in reform, disseminating best practices in the operations and management of power plants etc.

Objective 8 : Research and Development

To pioneer the adoption of reliable, efficient and cost-effective technologies by carrying out fundamental and applied research in alternate fuels and technologies To carry out research and development of breakthrough techniques in power plant construction and operation that can lead to more efficient, reliable and environment friendly operation of power plants in the country To disseminate the technologies to other players in the sector and in the long run generating revenue through proprietary technologies

Services Marketing
Strategies: Goals:
Develop a strong footprint for services business in the domestic and international markets Leverage the resident intellectual capital and skills in technical services and management systems for additional revenue generating opportunities Target annual revenues of about Rs 700 Crores in global markets and about Rs. 500 crores in the domestic market by 2017. Develop a portfolio of services for the domestic and international markets Engineering of new projects Operations & maintenance services R&M services for power plants Contracting and procurement services, R&D services and Training services Focus on markets in Asia-Pacific including India, initially. In addition, take an opportunistic approach towards the Middle East and African markets Establish a separate Services Marketing division for marketing the identified services Establish dedicated sales and marketing groups International sales offices in identified countries Regional sales offices Enter into Joint ventures and strategic alliances with internationally reputed organizations Adopt best in class systems for internal process improvements

Engineering
Strategies: Goals:
Provide efficient and quality services in Engineering Transform the Engineering division into a cost centre by 2005 and a profit centre by 2007 Champion the adoption of state-of the-art technologies, and address environmental priorities through inputs for adoption of clean coal technologies, and renewable and non-conventional sources Improve the efficiency of internal processes Improve manpower planning, allocation and monitoring processes Thrust for R & M engineering activities

Strengthen Hydro engineering skills

Set up an Engineering quality assurance cell Drive the adoption and absorption of state-of-theart technologies through a dedicated Power

Technology Centre
To constantly upgrade the competency of Engineering personnel

Project Management
Goals:
Set-up power plants in line with international benchmarks on lead time and budgeted costs : Achieve commercial operation of greenfield 500 MW coal based unit with a schedule of forty-five months from the date of investment approval with an interval of six months for subsequent units Achieve commercial operation of gas turbines with a schedule of twenty months from the date of investment approval with an interval of two months for each succeeding unit Achieve commercial operation of steam turbines for gas plants with a schedule of thirty months from the date of investment approval with an interval of four months for each succeeding unit

Strategies:
Improve transparency of project schedules Continuously upgrade internal systems of contracts, site execution and engg. division standardization and automation of key processes Proactively manage quality assessment and support for vendors Create a dedicated Systems and Policy group in Projects function to carry out benchmarking and environment scanning for adopting best practices. Create of a Project Supports Group in Projects function to improve the coordination across projects and associated functions. Introduce project management (Scheduling and Monitoring) for R & M activities. Separate Hydro group for development, execution and operations of hydro projects

Operations
Strategies:

Goals:
Operate and maintain NTPC stations at par with the bestrun utilities in the world with respect to availability, efficiency, productivity and costs Align O&M and support processes with relevant best practices Provide resources and inputs for various elements of O&M and R&M services and other services business

Set targets based on international benchmarking exercise and monitor performance through the planning and review process Continuously upgrade systems to maintain high operating performance Lay foundation for developing alternate maintenance strategies Improve support processes Optimise inventory levels Technical support to operating stations Develop databank of equipment maintenance history Support Services Marketing in developing and executing projects related to O&M and R&M services Renew thrust on execution of R&M activities Role of fuel management in developing alternate fuel strategies

Finance
Strategies:
Seek to effectively deploy higher amount of
shareholder returns Generate resources to finance the equity portion for NTPCs capacity addition program Raise equity resources from public at appropriate time Strive to reduce project costs by addressing interest during construction Have prudent debt:equity ratios for projects

Goals:

Tap domestic and international markets to borrow funds at most competitive rates

Manage borrowing portfolio to ensure low cost of

funds and cash flow matching Undertake tax planning

Commercial
Goals:
Work proactively with the Government and Regulatory Agencies for evolving tariff policies and principles which enable fixation of remunerative tariffs for mobilisation of adequate resources to meet national power plans Design and implement strategies for cash generation through prompt billing, improved collection of revenues and developing and operating more bankable contracts Strengthen customer relationships to prepare for a future competitive scenario

Strategies:

Working with the Government and Regulator on issues related to tariff policy and principles Design incentives and disincentives for customers

Securitise of outstanding dues

Ensure contractual and structural interventions Improve speed of commercial decision making Work with the customers and increase customer

focus

Human Resources Management

Strategies: Goals:
Actualise the HR vision of enabling NTPC employees to be a family of world class professionals making NTPC a learning organization Enhance organisational performance and commitment of employees by recognising and rewarding high performance Build a competency based organisation Institutionalise core values and create a culture of team-building, empowerment, equity, innovation and openness which would motivate employees and enable achievement of strategic objectives Competency building measures Revised Performance Management System Leadership development Integrated career planning, development and succession planning Training and development , e learning and global exposure Commitment building measures Enabling organisational climate Rewards and recognition Culture building measures Core values actualisation Communication System building measures Benchmarking Knowledge Management system

Information Technology
Goals:
Support growth in generation capacity by IT enabling project management efforts Support diversification into new business areas by supporting related strategic planning efforts and providing seamless interface with existing organisation Facilitate operational excellence by enabling management control through data/ information aided decision making, reducing cost and improving personnel productivity Facilitate stakeholder (internal and external) management through information dissemination, knowledge management and other training tools

Strategies:

Implementation of ERP

Implementation of add on packages

Strengthening the communication network Strengthen e-mail facilities Develop and implement intranet and extranet strategy Develop and implement MIS system Develop and implement e-procurement strategy

Develop demand forecasting and CRM tools

Thrust Areas
Thrust area Goals To help in the acquisition, demonstration and dissemination of state-of-theart technologies and practices to improve availability, reliability, efficiency, environment compliance and reduce green house gas emission To become a profit centre by 2006, offering services related to technology transfer and absorption Pursue achievement of stipulated norms for ash utilisation laid down vide Gazette notification (1999) for existing and new thermal stations

CENPEEP

Ash Utilization

Environment management

To set standards and monitor the environmental compliance of NTPC stations To set standards and monitor preservation of natural ecology in the vicinity of the stations To ensure that all stations of NTPC acquire ISO 14001 accreditation To continuously track and provide inputs to relevant government policies and adapt NTPCs policies accordingly
Prepare detailed Rehabilitation Action Plans (RAPs) for all projects and ensure timely implementation of the same prior to the commencement of commercial operation of the stations
Detailed strategies for the thrust areas have been outlined in the plan

R&R

Thrust Areas
Thrust area Goals Support NTPC stations in addressing key problems being faced and in improving their performance through failure analysis and applied research Conduct fundamental research in alternate fuels, non-conventional energy sources and new technologies Develop commercial options for distributed power generation Generate revenues by providing the results from fundamental and applied research to other domestic players To present and enhance NTPC's Corporate Image among internal and external stakeholders including the end-consumers Support development of a strong brand in the domestic and international market To comply with statutory requirements of Energy Conservation Act, 2001 To develop and deploy cutting edge energy conservation practices, especially in area of power generation
Detailed strategies for the thrust areas have been outlined in the plan

R&D

Corporate communications

Energy Conservation