R E S T R I C T E D

R e p o r t N o. T 0. 128b

This report was prepared for use within the Bank. In making itavailable to others, the Bank assumes no responsibility to them forthe accuracy or completeness of the information contained herein.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

EXPANSION OF TROMBAY POWER STATION

INDIA

May 13, 1957

Technical Operations Department Fl COPY

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CURRENCY EQUIVALENTS

(rounded figures)

One U.S. $ = 4.8 Indian Rupees (official rate, 4.762)One Rupee = 21 Cents (US)US $1 Million = Rs 4,800,000Rs 1 Million - US $210,000One Anna - 1/16 Rupee * 1.3 Cents (US)

EXPANSION OF TRO1iBEAY POWER STATION - INDIA

Table of Contents

PageSummary 1

I. Introduction 2

II. The Power Narket 3

III. Description of the Project 4

IV. Estimated Cost 5

V. I'iethod of Financing 6

VI. Estimated Financial Results 7

VII. Conclusions 9

Annexes

A. The Tata Powe.r Companies; Corporate and OrganizationalStructure.

B. Consolidated Balance Sheet.C. Power Generation and Sales.1D. Installed Capacity and System Demand.E. Cost of Power from Project.F. ExTenditure Schedule.G. Statement of Revenue, Source and Application of Funds.

H. Graph: Forec.ast of load growth and capacity requireinents.

EXPANSION OF T-.C' 'BAY PCGZIEJ SThrKh

INDIA

SUVIFIARY

This report covers an appraisal of a project for the addition ofa thermal generating unit of 62,500 Kw maximum capacity to a Bank-financedsteamL generating plant now nearing comnpletion near Bombay, India on the Tatapower system.!, The Tata system supplies power to most of Bombay State, in-cluding the city of Bombay and its industrial area.

The project is estimvated to cost the equivalent of 2 .0 million.The Bank has been requested to finance the foreign exchange cost, estimatedat the equivalont of ',9.8 million inclusive of interest during construction.The proposed loan would be for a period of 18 years including a grace periodon amortization pa7nments of approximately 3 years. The project, which shouldbe completed in April 1960, will help mreet a continuing shortage of powerwhich is particularly acute in the Bombay area pending construction of a largehydro development at hoyna.

1/ The Tata PowTer Companies, the borrowers on both the existing and proposedloans, comprise the privately owned Tata Iydro-Electric Power Supply Co.,Ltd., the Andhra Vaalley Power Supply Co., Ltd., and the -Tata Power Co., Ltd.

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I. IlIl)DUCTION

A loan of $16.2 million equivalent was made November 19, 1954 byIBRD to the Tata Hydro-Electric Power Supply Co., Ltd., the Andhra ValleyPower SupDly Co., Ltd., and the Tata Power Co., Ltd., a privately-oi ed groupengaged in providing wholesale power service in the Bombay region.LT The loanwas to aid in financing construction of a thermal power station near Bombay,having a total imaximum capacity of 125,000 Kw consisting of two identicalunits, together with transmission facilities and a receiving substation. Thispower station is now approaching completion. The first unit was placed inoperation in December 1956 and the second unit is scheduled to begin opera-tion in June 1957, which is approximately in accordance with the scheduleestablished at the time the loan was made. The project is being completedwithin the original cost estimates.

2. At the time the original Bank loan was made projections of powerdemand showed that, even after the completion of the project, some restric-tions on power use in the area would have to be enforced pending completionof the Koyna hydro-electric project to be constructed by the Bombay StateGovernment. This appraisal is still valid, with the exception that the an-ticipated shortage will be more severe than was forecast at the time theoriginal loan was made.

3. After assessing possible alternative sources of powqer with which tomeet the deficiency on their system the Companies now propose to expand theTromiibay station by adding a third 62, 5u0 hw thermal generating unit, and havesubmitted an application to the Bank for a loan equivalent to the amount offoreign exchange required for its construction. The Government of Bombay andthe Bombay State Electricity Board have approved the overall scheme, and theBombay Government is amending the Trombay license for the third unit. Undereach of the licenses granted the individual Companies, and under the Trombaylicense which is to the three Companies jointly, the State Electricity Boardof Bombay has the option to purchase the undertaking covered by the license.This option may first be exercised July 1, 1975, by which date the proposedloan would be fully amortized.

4. Data concerning the corporate and organizational structure of theCompanies, and their status as licensees under the Indiani Electricity SupplyAct of 1948 is shown in Annex A. The financial position of the three Companiesas of June 30, 1956 is shown in Annex B.

I/ Loan No. 106-IN; Report T.0. 27b.

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II. THE POWER MARKET

5. A power market study made by the Bank in 1954 of the Bombay -Poona region, which is the service area of the Tata Power Companies, was thebasis of power use forecasts for the appraisal of the original Trombay project.The projection of the power demand based on the 1954 study showed the needfor the two units included in the original project but indicated that evenwith this added capacity restrictions would have to be enforced between 1960and 1962, the latter being the expected completion date of the first lnit ofthe proposed Koyna hydro-electric project to be built by the Bombay StateGovernment to supplement the Tata system.

6. The latest data available indicate that the deficiency in capacitywill be more severe than was anticipated in 1954, and that even with theaddition of the proposed third unit at Trombay in early 1960 there will bea continuing shortage of power in the region until the first four units atKoyna can be put in service, now planned for about mid-1964.

7. The Bank estimates the date of initial operation of the first unitat Koyna as about September 1962. There is a possibility that units 3 and4 of Koyna could be brought into service at earlier dates than now contem-plated. This may be feasible and desirable but in any case it would not re-lieve the need for a third unit at Trombay.

8. Besides the ability of the third Trombay unit to produce power atan earlier date than could be obtained from any alternative source, its addi-tion will provide a desirable hydro-thermal balance on the Tata system. Aftercompletion of the proposed first stage of 2h0 M4W at Koyna plant this ratiowill be about 6 to 4 and Koyna can be used for optimum generation of energyfrom water available because it will not be necessary to hold reserve andemergency storage in the reservoir.

9. Tata supplies power wholesale to nine utilities for their distribu-tion systems, to large industries using more than 500,C0O kwh annually andto the State Railways. A chart showing the peak load growth on the systemin comparison with the avaiLable capacity is included as Annex H. It showsseparately the forecast of demand for the utilities, for the Railways andindustries and for the Tata system as a whole. The forecasts, which havebeen reviewed and approved by the Bombay Electricity Board, are conservative.The estimated average annual increase in sales from 1955 to 1960 is approxi-mately 12%. From 1960 onward the rate decreases to about 5%.

10. During the winter of 1961/62 the estimated power demand will exceedthe total installed capacity. During this period the Companies will resort

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to such devices as load staggering and suspending service to its newest cus-tomers during times of critical on-peak demand. The firm energy will alsobe insufficient during and im-nediately after this period, and unless un-usually favorable water years prevail the shortage in available total energywill make necessary a further curtaiLment of service. Sound utility practicewould require the installation of additional capacity, sulfficient to supplyfirm, power at least equivalent to the demand on the system. It may even provenecessary for Tata to install a fourth unit at Trombay if the system loadgrowth accelerates at a faster rate than shown in the forecast and especiallyso if the Koyna development is delayed beyond present estimates.

11. In Annex C the anticipated annual kilowatt hours generated in hydroand thermal stations and the Companies' annual sales are estimated for theensuing ten years. Annex D shows a cormparison of installed capacity withestimated system demand durin- the same Deriod, with the consequent deficiencyor margin in capacity and energy.

III. iDESCRIPTIJF OF THE PROJECT

12. The project consists of a third thermal generating unit, similar incharacteristics to the two umits now nearing completion, in the Trombay sta-tion located on the northeast shore of Bombay harbor. (See map in the Appendix)The unit will have a maximum capacity of 62,,5uO Kw in a 50 cycle turbo-generator supplied with steam from a 600,000 lb/hr. boiler. Operation willbe at 1,250 lbs. per sq. inch pressure and at 950 F temperature. The plantwill be equipped with coal crushing and handlin- equipment and will primarilyuse domestic coal from Central India. It will also be equipped to burn fueloil and by-products f'rom the adjacent Stanvac oil refinery; the latter fuel isnow used in the original plant. The Companies have secured assurances fromthe Govenaient of India thatI the necessary coal will be available and fromthe Railways that sufficient wagons will be made available for its trans-portation.

13. Certain ancillary works are included in the project, such as a newstack, an extension to the existing intake arrangements to take cooling waterfrom the sea, additional storage tanlks for water and fuel, transmission lineintercornections and accessory substation and electrical equipA,Ient.

14. The CoMtpanies are negotiating a contract I ith Burns and Roe, Inc.,of Nlew York City to perforrm any additional design work required and to manageand centrol construction activities, ircluding purchasing, inspectioni, expedi-ting deliveries and the starting and testing of equipment upon comprletion.These services are similar to those performed by Tbasco Services for the firsttwo units of the Trombay plant except that, insofar as nractical, the originaldesigns will be utilized. The consultants are satisfactory to the Bank andthe conditions of the contract are to meet the Bank's approval.

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IV, ElTIJL-.TED COST

15. The cost estimate of the project, revised by the Companies duringFebruary 1957 to reflect current prices, and broken dow,m into foreign ex-change and local currency components, is as follows:

Foreignexchange Localcost currency Total cost($1,000 cost (Rs 1,000equivalent) (Rs 1,000) equivalent)

Boiler plant, with coal burning andash handling equipment 4,705 3,585 26,168

Turbine, generator and condensingequipment 1,575 5,848 13,O10

Accessory electrical equipment, andtransmission extensions 950 3,402 7,961

Housing and structures 0 948 948Ocean freight, insurance and duties 583 1,601 4,4olEngineering fees and overhead costs 819 1,994 5,926Contingencies 368 1,622 3,386

Sub-totals 9,000 19,uOO 62,200

Interest during construction 803 1,336 5,190

Total 9,803 20,336 67,390

Total estimated cost, expressedin Rupees Rs 47,000 Rs 20,400 Rs 67,400

Total estimated cost, expressedin equivalent $US US$v 9,800 US h,200 USaP' 14,000

(figures rounded)

Percent 70% 30% 100%

16. The cost estimates for the principal equipment items are based onfirm prices, and hence are -realistic. In view of the desirability of havingthe same type of equipment as the first two sets, Tata requested the suppliersof the original boiler and generating equipment to quote prices and deliveryschedules for the new unit. A satisfactory price and schedule was obtainedfor the boiler from the previous supplier, Steinaullers of Germany, andorders were placed for this unit. The supplier of the turbo-generator, AEGalso of Germany, while quoting a satisfactory price, was unable to offer an

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acceptable delivery schedule. Accordingly, international bids were invitedon the turbo-generator with the result that AIG made the most satisfactoryoffer. iregotiations are now under way -with Z>G to improve the delivery anderection schedule to the extent poSsible over that indicated in the formalproposal.

17. On the basis of overall estimates, the incremental cost per Kw ofthe additional units will amount to the equivalent of $225, a figure about10%' above the estimated final cost per 1w for the first two units. This costis reasonable. The cost of power produced in the thilrd Trombay unit is esti-mated at 0.79 anna (10.3 r,ills) per kwh, which is reasonable. (See Annex Efor detailed costs.)

18. The extensions required in distribution facilities to utilize theadditional pmoer to be provided by the project are already being raade by thedistribution companies. These companies are expected to have adequate fundsto carry out the required expansion program.

19. Initial operation of the project is contemplated in April 1960.The schedule is a tight one b1ut is considered realistic. Any delay in thedelivery schedules for the boilers or turbo-generators would, of course,affect the completion date. A schedule of expenditures is attached asAnnex F.

V. L 7H'1}J OF FINAICING

20. The Companies plan to cover the foreign exchange requirements forconstruction costs of the project by fr.eaxis of a loan from the Bank.

21, All the local currency financing will come fron^- the Coimpanies' ownresources.

22. A provision in the New Electricity (Supply) Amrendient Act of 1956enables the Companies to a-opropriate annually to a Development Reserve amountscalculated by reference to the cost of n-iv investments coming into operation,and to use the reserve for investment purposes. The Companies estimate thatRs. 14.9 million will in this way become available for the project.

23. The sources of finance will be as followfs:

IBP) loan Rs 47.0 million

Internal resources of the Companies:Develo-pment Reserve 14.9Other 4.1 19.0

Rs 660 i llioni/

The Bank loan would cover about 70, of t'ne total cost.

1/ Including interest on borrowed money only.

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VI. ESTIMATED FINANCIAL RESULTS

24. Under the Electricity Supply Act of 1948, a licensee engaged in theutility field must adjust rates for the sale of electricity by periodic revi-sion so that the "clear profit" in any one year shall not, as far as possible,exceed the amount of "reasonable return" which is, at present, 51c% of the"Capital Base". "Capital Base" is defined as the original cost of wJorks andworks in progress, plus an allowance for intangibles, inventories and workingcapital, less depreciation of the assets according to a schedule -which specifi-cally states the maximum rates. "Clear profit" is defined, under the Act of1948, as income derived from the sale of energy, rentals and other generalutility receipts, less normal operating expenses, taxes, depreciation, andinterest on long-term borrowings was admitted as an expense.

25. An amendment to the Act of 1948 was voted by the Parliament of Indiain Decenber 1956. The amendment provides, inter alia, that interest on long-term borrowrings will no longer be an allowable charge in arriving at "clearprofits", and that the reasonable rate of return will be established as 2%'above the official discount rate of the Reserve Bank at the beginning of theyear, with a minimum rate of 51iO. The present Reserve Bank- discount rate is 3i2,lsb

wYhich gives a rat' of return on the "Capital Base" of i t is understoodthat the inew basis cay,,e into effect on ril1 1957. Thereafter, underthe indian Electricity Rules 1956, the financial year for all electrical under-takings is to end on Larch 31.

26. In making their estimates, the Comr,panies have taken the perrmissiblereturn for the 9 nonths to iiarch 31, 1957 as 50 and have deducted the intereston long-tern debt in arriving at "clear profits". For the years 1957/58 on-wards, the Companies have taken the provisions of the amendment into account,and have assumed that their tariff rates would be set at a figure which wouldsecure a return on the Capital Base of 51-%. A statement, based on the Com-panies' assumptions, but slightly modified, showing estimated revenue, sourcesand application of funds, available funds and debt service coverage has beenprepared and is attached as Annex G.

27. For purposes of calculation the proposed Bank loan has been assumedto have a term of 18 years, with a grace period to ApriJ 1960 (last amiortiza-tion payrment April 1975) an-d an interest rate of 5- .2/Full dividend payment onthe preference shares and 7;% dividends on the ordinary shares, have beenassumed.

28. No provision has been made for the payment of corporate income taxesby the Companies during the years sho!n in the statement. The Coompanies wiillreceive for tax purnoses large development rebates when the new Trombay assetscome into operation, and normal plus additional depreciation for the first sevenyears of operation. These allowances can be set against profits for tax pur-poses and any excess of allowances over profits can be carried fomiard as in-come-tax losses to succeeding years. The Cor,-panies estLi-ate that these un-absorbed taxes will continue for about 11 years (some 3 years beylond the periodunder consideration) during which time no tax liability would arise.

1/ The "reasonable return" also includes rinor additions related to invest-ments and development reserve.

2/ Subsequent to the printing of Annex iJ the interest rate has been deter-

mined at 5-5/8,. The effectsof this change in rate are negligible.

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29. The Co,npanies plan substantial outlays for system improvement andexpansion not only in subse(luent years, but also while the first and secondTrombay projects are being executed. To neet these outlays and to repay thefull amount of their debt to local banks, the Companies intend to sell a totalof Rs 30 million of new 5%- debentures in the years 1957/58 and 1958/59. TheRs 9.8 million, 4% debentures of Andhra falling due in 1959 are expected to berefunded at j. These assumptions have been taken into account in the pro-jection.

Estimated Earnings

30. The annual net profits from April 1961, when all three Trombay unitswould be in full operation, to 1965 would average about Rs 11.5 million, whichwould amount to a return on share capital of approximately 9%. Interest pay-ments Tjould be covered by net operating revenues about 2.3 times from 1961/62onwards.

Dividend Policy

31. The Tata Companies pay dividends of frcm 7% to 721', according to theissue, on their preference shares. They expect to pay dividends of 7Tj% ontheir ordinary shares, so as to maintain their market rating at a high level.

Cash Position

32. The statement shows that cash availabilities (over and above minimumworking capital) would fall. froim Rs 16.4 million in March 1959 to 'Ls 2.9million in lIarch 1963 as a result of the heavy construction program; subsequentlythe figure would increase.

Financial Position

33. A pro-forma balance sheet of the combined position of the threeCompanies as of lIarch 31, 1961, when all Trombay units should be completed andin operation, is as follows, compared with the balance sheet as of June 30,1956: (IMillions of Rupees)

Actual Pro-formnaAssets June 30, 1956 Miarch 31, 1961Plant, equipment andwork in progress 277.5 458.3Less depreciation 65.2 99.6

212.3 212.3 93.0,% 335.7 358.7 94. 8,%oNet current and otherassets 16.2 7.0e 19.9 5.2,%

228.5 lT0.0% 378.6 100.0%

Capital and Liabilities

Capital and reserves 153.8 67.3%O 194.6 514aSLong_terrm debt:IBRD Loan No. 106 IN 31.1 (13.6%) 69.4 (18.3%)Proposed IRD loan - 45.0 (12.0%)Debentures 39.6 (17.3%) 69.6 (18.3-o%)Local borrowings 4.0 ( 1.8%) -

7177 74.7 32.7% 18h.0 184.0 4__6_228.5 100.0% 378.6 1700.O%

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34. Total long-term debt would represent about 51% of net fixed assets.The debt-eqlity ratio as of LIarch 31, 1961 would be about 49/51, compared witha ratio of 33/67 as of June 30, 1956.

Debt Service

35. In 1960/61, the first year of full debt service on the proposed IBRDloan, total debt service would be covered about 2.1 times by net operatingrevenue before depreciation, a coverage which would continue at about thesame level. However, it should be noted that no sinking fund nor amortiza-tion is provided in respect of the debenture debt of the Companies, which re-presents about 331 of the total long-term debt.

Security

36. The existing Bank loan is a general ooligation of all three Companies.It is secured by a deed of Trust constituting a first mortgage, principally onthe Trombay license and plant, and the Carnac receiving station, and by afloating charge on the other physical assets appertaining to these properties.It is suggested that the existing secarity be extended to cover the new assetsto be created by the Trombay extension and that the au0nented assets secureboth loans.

37. The Borronjers agreed in the first loan agree,nent - inter alia - notto create, without the approval of the Bank, further rfmortgages in excess of(1) Rs 20 million for the sole purpose of financing or refinancing the originalcost of the project, and (2) Rs 5 million outstanding at any time in short-term borrowings from banks. In connectioi with the new loan, the Bank hasagreed to increase the amount under (1) to Rs 30 million; the amount under (2)remains the sarne at qs 5 million.

VII. CUNCLUSIUllS

38. The project is sound and its estimated cost is reasonable. The marketestimate is conservative and indicates an urgent need for the project. Thearrangements for engineering work and supervision of construction are satis-factory. The management of the Companies is capable of executing and operatingthe project. Their financial position is sound.

39. The Borrowers are to be The Tata hydro-Electric Power Supply Co.,Ltd., The Andhra Valley Power Supply Co., Ltd., and the Tata Power Co., Ltd.,the same as for the original plant which the present project would expand.

40. The project is suitable for a Bank loan equivalent to $9.8 million,which would cover the estimated foreign exchange cost, inclusive of interestduring construction which, in view of the heavy construction program, cannotbe provided for out of the Companiest resources. A term of 18 years wouldpermit full amortization of the loan before the date when the Electricity Boardcould exercise its option to purchase the undertakings of the Companies. Basedon the construction schedules a grace period of about 3 years before aimortiza-tion payments begin would be appropriate. The existing security provisions willbe extended.

LI21ILX A

THE TATA PO-JER COtSANIES

Corporate and Ormanizational Structure

Th-e Tata Power Companies are a group composed of the Tata Hydro-Electric Power Supply Co., Ltd., formed in 1910, the Andhra Valley PowerSupply Co., Ltd., formed in 1916, and the Tata Power Co., Ltd., formed in 1919.These Companies are privately-owned separate entities but operate as a groupunder the direction of the same managing agents, the Tata Hydro-ElectricAgencies, Ltd. They form a part of the Tata association of enterprises whichhave substantial financial resources, an excellent credit rating, outstandingmanagerial ability and a long and successful history of operations in manydifferent industrial and other fields in India. The three Companies haddeveloped the potentials of their hydroelectric resources to an economicmaximum before 1942. Since then, capital expenditures have been confinedto the improvement, moderilization and minor expansion of generating plants,and the enlarging of transmission facilities.

Part of the properties composing the Tata Companiest system, princi-pally the hydro plants, are owned by the companies individually; other partsof the property principally the transmission lines and substations, are ownedjointly in the ratio 2, 3, and 5 for Hydro, Andhra and Power respectively.The Tata Integrated System however includes a thermal station at Chola partef which is owned by the Central Railway and the other part by the BombayState Government. This generating equipment is tied into the Tata transmissionsystem. The Railwzay and Tata have a power interchange agreement whereunderTata supplies power to the Railway during system peak periods and receivespower during the rest of the day. Tata has been buying the entire output fromthe generating units of the State Government. The Western Railway, which hasno generating facilities, receives power from the Government's Chola Plantover the Tata transmission system and pays Tata a fixed amount for transmittingthe power.

In 1939, the Tata Companies (Hydro, Andhra and Power) entered into areciprocal agreement todefine the sphere of the operations of each party, topromote cooperation between them and to preserve arnd protect the interests ofthe three Companies. This was necessary because of the common areas of supplyand joint contracts for the sale of power. This agreement was modified inSeptember 1954. As a result of this modification, all bills are payable tothe Tata Power Company and this company pays for all the energy purchased fromthe Government's Railwray generating plants. The Tata Power Company calculatesthe average net unit rate for energy sold and allocates revenue more or lessaccording to the basic annual capacities of the three Companies.

The three Tata Companies have separate Boards of Directors. Mr. J.R.DTata is Chairman of each Board; the other members, who in some cases sit on

Ak1TEX A - page 2

more than one Board, are representatives of the leading industrial and bankinginterests in India. Recently a Government member has been added to each ofthe Boards of Directors.

The three Tata pouer companies have a long and successful financialrecord.

Dividends have always been maintained on the preference shares. The 7%preference shares of two of the companies are currently quoted at around 107to 109, and the 72% preference shares of the third company at about 113. Thusthe yields are about 6.5,6 and 6.6'. Dividends of 7" on the ordinary shareshave been paid every year since 1946.

The dividends paid out have not been the maxip,nn possible; over recentyears about 30' of net earnings have been retained.

Interest coverage has been good. For the year ended June 30, 1956interest, after capitalizing the part appropriate to new construction, wascovered tbout 7.5 times and if the capitalized interest is also taken intoaccount, the total interest was still covered over 4 times.

ANiT I X B

TAIT C ?AIfITES

Position as at June 30, 1956

(rmillions of 2Rupees)

Hydro Andhra Power CombinedASSETS

Plant and equipment 4L.3 63.7 113.3 231.3Construction work in progress 9.3 13.8 23.1 46.2Inventories 2.1 2.2 5.6 9.9Advances and book debits 4.5 6.3 11.3 22.1Cash and investmfents 4.4 4.8 6.9 16.1

69. -93J. 165.2 325.6

LIABELITIES

Capital, issued and subscribed:Preferred 8.9 5.0 8.7 22.6Ordinary 24.0 30.2 51.6 105.8

32.9 35.2 T7 128.4General reserve 4.5 3.4 12.1 20.0Contingencies Reserve 1.4 1.5 2.5 5.4

37. 40.1 74.9 15-3.Depreciation Reserve 14.8 22.2 28.2 65.2

Long-termn debt:IEMD Loan No. 106 IN 6.2 9.3 15.6 31.1Debentures 9.8 29.8 39.6Local borrowings 4.o 4.0

10,2 19.1 i47. 74.7

Current liaoilities 5.8 9.4 16.7 31.9(797 70-. -b' 163.2 325.6

ANNEX C

TATA POWER SYSTEM

Estimated Generation and Sales. 1955-1965(millions of kwh)

Maximum Total Tata Sales toYears system Hydro Thermal system supply utilities

ending demand genera- genera- genera- System to and largeMarch 31 (ML tion tion tion losses railways industries

1956* 344 1,305 621 10926 211 320 1395

1957** 380 970 596 1,566 160 250 1,156

1958 440 1,3C'0 1,160 2,460 250 340 1,870

1959 503 1,300 1,430 2,730 280 350 2, 10Y

1960 541 1,300 1,760 3,060 300 360 2,400

1961 580 1,300 1,950 3,250 320 370 2,560

1962 630 1,300 2,220 3,520 340 380 2,800

1963 664 1,660 2,070 3,730 360 390 2,980

1964 700 2,380 1,600 3,980 400 400 3,180

1965 732 2,580 1,680 4,260 430 410 3,420

* Act-al** 9 months, July 1, 1956 to liarch 31, 1957

AN'MNEX D

TATA P0UTER SYSMh

Comparison Installed Capacity and System Demand

AnticipatedInstalled Firm deficiencycapacity availability Required (or margin)

Years Capa- Peak genera- Capaci-ending Hydro Thermal Total city Energy demand* tion ty EnergyMarch 31 SW IN IX4W 'l4W m. kmh 1Ui m. iakh. IT- m. kwh.1956* 274 110 3814 344 1971 31414 1926 i --+-45

1957 .* 110 384 344142714 172 14146 366 1660 380 1566 - 14 + 94

1958 2714 172 446 344 2690 440 21460 1 +230235 509 1429 1 23

1959 27h 253 527 1447 2780 503 2730 - 56 + 50

1960 2714 253 527 447 3050 541 3060 -31 - 10

1961 2714 316 590 510 3050 580 3250 - 70 -2001962 274 316 590 510 3050 630 3520 -120 -470

1963 274 520 510334 316 650 570 3490 664 3730 9 -240

19614 334 650 5703914 316 710 615 14210 700 3>301454 770 675 - '25 +230

1965 4514 770 675 , 7514 316 830 735 hl 732 6 + 3 +150

* At end of fiscal year.**^- Actual, July -1, 1555 to June 330, 1956.

*-'>- 9 raonths, July 1, 1956 to ilarch 31, 1957

Note: The installed capacity is the aagregate of the nameplate or capabilitycapacities of all the generators on the system. The firm availability capacityis the total installed capacity less the nameplatLe capacity rating of the largesthydro unit and the largest thermal unit. NJo deduction has been made for frequencyor on line (soinning,) reserves until after thle scheduled oDeration of the firsttw.o units at Koyna in 1962-63, after which time a 2F% spinning reserve (15 jiW) wasdeducted. Estirmates of energy from hydro instaila,,ions are based on an averagewater year.

AJMlPEX E

ESTJiATED COST OF POVITE FRO!j T1--rL UINIT AT TRuivBAY

Capacity, 62, 500 kwEstimated. total cost of project, Rs 67.4 millionEnergy capability, 375 to 400 rmillion kwh/yr.

Rs in lakhsOperating Expenses

A. Fixed Charges

(a) Interest and taxes at 91, of capital cost 60.7(b) Depreciation at 3 -iyr. 23.6(c) lIaintenance 9.0

Sub-Total, per year 93.3

Cost per unit for fixed charges(based on 375 million kwh/yr.) 0.398 annas (5.2 mills)

B. Fuel Charges

(a) Based on a cost of coal containing 9,000 BTU/lb.delivered at Rs 42.0/ton,

(b) Thermal efficiency of station of 11,800 STU/kwh,for power delivered at outgoing station meters,

Resulting cost of coal fuel per kwh 0.39 annas (5.1 mills)

Total cost A + B, per kwh(based on375 million kwh/yr.) 0.788 anaas (10.3 mills)

C. Alternative fuels, in projected plant

Cost per kwh, hiot pitch fuel (including duty) O.7-7 an-nas (10.L4 mills)Cost per kwh, furnace oil 0,971 annas (12.6 mills)

D. Cost of power on Tata s-ystem, with third unitat Troribay added

Average cost per izjh of powrer sold by Tata system:

(a) Including 1st. and 2nd, units of Trombay 0.425 annas (5.5 mills)(b) Including three units of Trombay 0. 4 87 annas (5.3 rmills)

;T7 F

C0HF- 1.1'CTIONT EXP?1 II TThZE SCIZJJUIL

(-L,000)

Years IBIiD Loan Local currency Totalending exoressed in expressed in expressed in1.-rc'!h 31 _____ s Rs Rs

'~.958 2,209 10, 6Go 3,100 13, 700

1959 43 545 21,800 9,000 30, 800

1960 2,234 10,700 6,100 16,800

Afteriiarch 31,1960 815 3,900 800 h,7(0

Totals 9,803 47, (uou 19,000i/ 66,V 0-

1/ Exclusive of interest during construction on local currency.

AM=E G

THE TATA COMAPANIES

Statement of Revenue, Source and Application of Funds, Available Funds and Debt Service CoveraZeon a combined basis

(Expressed in Milliorns of Rupees, except where otherwise stated)

Years endine March 31: 1297 1958 1-959 1960 1961 1962 -1963 1964 -1965

(9 months)

I. EnerGy Sales

Millions of KWH sold 1156 1870 2100 21s0C 25,60 280C 2980 3180 3420

Average Sales Price per 10.H in Asnaes .,,6 .57 .56 .59 .56 .55 .55 -.55 .55

11. Revenue Account

Revenue fromn Sale of Energy 32.9 67.2 73.7 89.4 90.0 97.3 101.5 119.1 118.6Other Pevense 1.5 1.8 1.7 1.17 1.7 1.7 1.7 1.t7 1.7Total Re-enue T- b 75.4 91. 91.7 99.0 103.2 110. 120.3

Op;eratfng end Administrative Expenses 19.1 37.5~ 46.3 54.8 58.5 65.4 70.2 78.3 87.9.)epreciation 2.7 5.3 7.8 8.1 10.5 10.8 11.1 31.0 11.1Contin6enc-v Peserve 1.0 .9 1.0 1.0 1.1 1.1 1.1 1.1 1.1Developro.ent FPenorr - 7.2 1.1 6.6 3.1 1.1 .4 .2 .2locatiozn _____________________________________________________

N,s 0,nratoncg and other Revenue 11.6 lo.1 19.2 20.6 20.5 20.6 20.4 20.2 20.0

interest on:ExilstL-ng Debentures 1.2 1.6 1,6 1.6 1.8 1.6 1.8 1.8 1.5Local Borrowines ond New Debentures .2 .5 1.1 i.6 1.6 1.6 1.6 i.6 1.613RD Loa:n i36-IN 1.8 3.7 3.-7 3.6 1.4 3.3 3.1 2.9 2.7Procosed TBIOD Loan - .2 1.0 1.6 2.5 2.5 2.4 2.3 2.2

3.2 6.o 7.4 8.4 9.3 9.2 6.9 d.o 8.3

less Interest durine Construictioncapitalized iS. 3.9 1.0 1.6 1.0

1.4 2.1 6.4 6.32 8.3 9.2 8.9 6.6 8.3

Niet Profit 10.2 16.0 12.8 13.8 12.2 11.4 11.5 11.6 11.7

Net Profit a. percentagze of Share Capital 10.6 12.4 10.0 10.7 9.3 8.9 8.9 9.0 9.1

1II. Sou,rce of Po,nds

ITet OpecratinL and other Revenue 11.6 18.1 19.2 20.6 20.5 20.6 20.4 20.2 20.0Aid iack - ercainProvision 2.7 5.3 7.8 8.1 10.5 10.8 11.1 11.0 11.1

- Develo.neo. Provision 7(.2 1.1 6.6 1.1 1.1 .4 .2 .2Peoeipts5 fcon Operetl.ons 14.3 30.0 28.1 33.3 32.1 32.5 31.9 31.4 31.3)

Sales of Assets .1 .1

Local Saris Borrowings 1.0120,w Dobentares 15.0 15.01522 Loan 108-IN 27.1 15.5Propused 222D Loan 10.6 21.8 10.7 3.9

42.4 75.7 64.9 46.1 --36.0 32.5 32.0 31.4 31.3

IV. AppIication, of Funds

Capital Expenditures:let Trombay Pro3-ect I/ 34.4 26.82od Trombay Project !7 13.7 pO.8 16.8 4.7Other 6.7 8 9.0 15.5 14.0 9.0 8.0 6.o 6.0

Tintel Capital Expenditures 41.1 49. 39.8 32. 187 .9.0 .0 .0 6.0

Debt Servic.e;Existing Debentures -interest 1.2 1.6 1.6 1.6 1.8 1.8 1.8 1.8 1.8Local Borrowings & New Debentures -interest .2 .5 1.1 irs 1.6 1.6 i.6 1.6 1.6Local Borrowings -rsra3ment 5.0IB2D Loan, 106-IN interest 9/3.7 3.6 3.4 3.3 3.1 2.9 2.7

amsccrtization 1.6 3.3 3.4 3.6 3.8 3.9 4.1Proposed IBnD Loan - interest 2/ 1.5 2.5 2.4 2.3 2.2

-aortization 2.0 2.1 2.2 2. 2.4Total Debt Service 1.4 7.1 8.70 10.1 13.7 14.9 -14. 48 1.

Increases in Working Capital 3.9 2.0 1.0

Dividends:Preference 1.2 i.6 1.6 i.6 1.6 1.6 1.6 1.6 1.6Ordinaryi 3.6 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0

8.8 9.6 9.6 9.6 9.6 9.6 9.6- 9.6 9.6

49.3 69.6 59.4 53.0 42.0 33.5 32.5 30.4 30.4

V. Available Funds

Surplus or (shortage) for year (6.9) 6.1 5.5 (6.9) (6.0) (1.0) (0.5) 1.0 0.9Available at beginning of year 11.7 4.8 10.9 16.4 9-.5 3.5 2.5 2.0 3.0Available at end of year 4.8 10.9 16.4 9.5 3.5 2.5 2.0 3.0 3.9

VI. Debt Service Coverage

Set Operating Revenue 11.6 18.1 19.2 20.6 20.5 20.6 20.4 20.2 20.0Interest Payable 3.2 6.0 7.4 8.4 9.3 9.2 8.9 8.6 8.3

Number of times Interest covered 3.6 3.0 2.6 2.4 2.2 2.2 2.3 2.3 2.4

Net Operating Revenue before Depreciation 27.0 28.7 31.0 31.4 31.5 31.2 31.1Debt Service 9.0 11.7 14.7 14.9 14.9 14.8 14.8

Number of times Debt Service covered 3.0 2.4 2.1 2.1 2.1 2.1 2.1

~/including interest on borrowed money during construction period.9/excluding interest during construction capitalized.

TATA POWER SYSTEM

I-oo FORECAST OF LOAD GROWTH IVSrTALLED CAA AO G

CAPACITY REQUIREMENTS __75APRIL1957 PERIOD 95E-9 A R BR0E-I3049

800 _ _ _ _ _ _ _ _

700~~~~~~~~~~~~~~~~~~~~~~~~~~~~7

600

~500 _ __ _

300 _

200

1953 1954 1955 1956 1957 1958 :959 1960 ~96: ~962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 >APRIL 1957t YEAR r-U

IBRO-304R(2 Z~(

FOOTNOTE: The i=stalled c-paity Il the aggregate of the sameplate or X

capabUfty capacities nf .11 the generators on the system. The firnm availability Ieap.cfy in the total Installed capacity less the nameplate Capacity ratingof the laegest hydro unit and the largest thermal .nit. No deduction hao beesmade for frequency or on Ii.e (spinning) reserves u-til after the orhedtledaper-atin of the first two anita at Koy-a in 1962 - 63, after which ti-e a2-1/2% spinig reserve (15 MW) was deducted.

ANNEX

Xhi~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~0M0' 00f Frw 00 ,SCAAI^b

J2t/t ¢n SAZ5 T AT A T. RA onamo *. o,o /0000

TEOMBAY ' XRA /SO;SA 110 rv EXISTING LINEA

HOC 5T{NHa < cfoAATE

<8wv ~~~~~~~~~~~~(N5R)~~i~ 0ALO 0105 ELECTRIlC POWER

t _ t $ \ ., ,, . , < ,,0 KV~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~YR GENE15TING STAION --

> t( - + - / 4> ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~TiERMAL iPOWER STATIOiN

's rHe:VL: L:KE ) X RECEiVING STrTIOEE G T

ANANRDH19R7 12RD-299