Chapter 335 Power Industry
The Indian government is actually encouraging private capital to enter the power industry. It is almost impossible for the state alone to cover electricity consumption for all residents.
The government not only introduced preferential policies for power projects, but also allowed foreign capital to hold 100% of the shares of power companies for the first time.
According to the Foreign Exchange Management Act, there are strict restrictions on the proportion of foreign investment in other industries, except for electricity.
This infrastructure project requires huge investment, and local businessmen are very reluctant to invest, so the government treats foreign capital as a scapegoat.
The Dabao Power Plant, invested by the American Enron Corporation, is a product of this era. They just signed an investment agreement with the Indian government last year.
It is said that the first phase of the project will invest US$3 billion and be guaranteed by the Indian government. The Maharashtra Electricity Board will purchase electricity at market prices after the Dabo Power Plant is completed.
The conditions were very generous and provided Enron with sufficient protection.
At that time, Asian countries were using project financing to attract private funds to start infrastructure projects.
The Congress Party also has similar ambitions. They launched the "neoliberal economic plan" at all costs and approved a series of major energy projects using foreign capital and new technologies, hoping to achieve a "great leap forward" in infrastructure as soon as possible.
Ron wanted to invest in electricity, and the timing was right.
Not only are the review conditions relaxed, but there are also a large number of preferential policies.
Of course, the biggest advantage is that he has free coal mines in Songbadra, which means he doesn't have to consider 75% of the fuel costs for thermal power generation.
You don't need any calculations to know that this deal is a sure win.
Since Tilaka's death, Songbadra has been in a power vacuum.
The original gang was divided into pieces, and everyone wanted to become the next big boss.
As a result, before it could become a big deal, it was swept away by Ratan and his men.
This place is going to be developed into a mining center by the Sul family, so how could they allow those trash to exist?
As for what will happen to the local residents’ income if the gangs and various gray industries are gone?
What is there to hesitate about? Sur Mining Company is recruiting workers on a large scale.
"Brother, I will build a manor here, and you will be in charge of Songbadra from now on."
"Okay." Ratan waved his hand nonchalantly, "With me here, no one dares to act recklessly."
"Leave Mirzapur to cousin Arian. You two can take care of each other if anything happens."
"Brother, no one dares to pick a fight with us in the East anymore."
"It's better to be careful."
As Ron's business grew bigger, more and more people in the family got involved and assisted him.
Ratan doesn't even grow his own hemp anymore. The income from that stuff is only about a million yuan a year at most.
The dividends the cement factory gave him last year easily surpassed his income from hemp several times over.
There will be even more this year, and maybe each company will get a profit of more than 100 million rupees.
This does not include the large cement plant that has already started production in Gujarat and the third cement plant that is about to be built in Sonbhadra.
Oh yeah, and a power plant.
"Brother, are you really planning to build a power plant?"
"Yes, what's wrong?"
"You know, the people in Pufancha are dishonest. It's common for them to default on their electricity bills. What's worse is that everyone steals electricity and doesn't like to spend money at all."
Ratan felt that opening a power plant was not a good idea. He knew the unruly people of Uttar Pradesh best. They were all lawless and did not care whether what they did was illegal or not.
Look at the electric poles in the village. They are covered with private wires like a spider web, which makes your scalp tingle.
This is the case in every household, and this phenomenon has continued for many years, so that many people do not think it is an illegal act at all, but a natural "way of survival."
One-third of the electricity supplied by the Uttar Pradesh Electricity Board to rural areas is stolen by villagers, and electricity theft is rampant.
Ultimately, the electricity price is too high. Ordinary residents spend 5-6 rupees per kilowatt-hour, and the total electricity consumption is about 20 kilowatt-hours per month.
The electricity bill alone costs more than 100 rupees, which accounts for about 10% to 20% of the total income of a rural household.
It is too expensive and farmers in Uttar Pradesh cannot afford the high electricity bills.
However, Ron was not targeting the rural market. He certainly knew that the three brothers liked to steal electricity.
"I am going to provide electricity exclusively to the Lucknow area, which has a population of nearly three million and faces a huge electricity shortage."
"Lucknow?"
"yes."
"Isn't your power plant built in Songbadra?" Ratanchi asked.
"No, the power plant is located near Lucknow. The power supply network there is relatively well-developed, which can save us a lot of grid connection costs."
“But the coal mine is in Songbadra,” Ratan was puzzled.
"Power plants don't necessarily have to be located near coal mines. Another option is a power consumption center."
If Songbadra were a metropolitan city, then locating the power plant there would be perfectly reasonable, as there would be both readily available fuel resources and a sufficient electricity market.
Unfortunately, this is the eastern part, the Pufancha area, a filthy place. Except for the urban areas, other places are extremely poor.
At this time, Ron could only place the power plant at the power consumption center and then transport the coal from Songbadra to the power plant.
"This distance is not short, it's more than 400 kilometers." Ratan raised his eyebrows.
"Take the railway. There are trains from Sonbhadra that go via Lucknow."
"That crappy train station only has one train a day," Ratan complained.
"The people from the Railway Bureau have agreed to add a special train for us."
"Hey, those vampires are so easy to talk to?"
"He bought me a Rolex two days ago."
"Okay, that makes sense."
"But they finally gave us a discount, 100 rupees per ton of coal for transportation."
The normal market price is 200 rupees per ton, but thanks to Rolex, Ron got a quote that was cut in half.
Anyway, we are using national resources, so the freight has nothing to do with the people in the railway bureau.
Ron's entry into the power industry was not a whim. He had already consulted technical experts to calculate and found that this business was definitely profitable.
More than 75% of the operating costs of a power plant are spent on fuel. For example, coal costs 800-1000 rupees per ton.
Taking various factors into consideration, the cost of generating electricity per kilowatt-hour is approximately 5-6 rupees.
Looking back at the electricity prices, residential electricity costs 6-7 rupees and industrial electricity costs 7-9 rupees.
If you only look at the unit price, there is actually not much profit to be made. Only after the scale effect is formed can there be considerable profit.
But Ron's coal is free, and the entire Songbadra mine belongs to him.
Leaving aside the equipment, the cost of a power plant is probably just shipping, labor and equipment depreciation.
After careful calculation, the power plant he built only cost 1-2 rupees per kilowatt-hour.
The cost was ridiculously low, there was no reason for him not to do it.
Look, in Uttar Pradesh, the profits from collusion between officials and businessmen are far beyond the imagination of ordinary people.
Ron plans to first invest in building a small or medium-sized power plant with a generating capacity of around 100 megawatts.
Taking into account the 45% thermal efficiency of coal, the power plant can output 432 million kilowatt-hours of electricity per month.
This certainly does not mean that all 432 million kilowatt-hours of electricity can be effectively delivered.
Grid connection losses and other losses must also be taken into consideration, and the amount of electricity actually put into the market is approximately 300 million kWh.
Combining residential and industrial electricity consumption, Ron's power plant makes a profit of 5-6 rupees per kilowatt-hour.
Tsk, a 100 MW power plant can easily earn Rs 1.5-1.8 billion per month.
This is the huge profits made by the power industry after monopolizing coal energy.
However, the profits are very attractive, and the money invested in this project is worth its huge returns.
According to conservative estimates, the investment in building such a power plant would be at least 2.5 billion rupees.
70% of the funds will be used to purchase generators and build transmission networks.
This does not even take into account the impact of land, coal, and taxes. Without government connections, few businessmen have the strength to enter the power industry.
The business is still in its infancy, and Ron has just reached a preliminary agreement with Lucknow.
The two parties agreed that after the power plant is built, the Uttar Pradesh Electricity Board will purchase the electricity at a price of 5 rupees.
This is equivalent to having the government backing it up. Ron is guaranteed to make a profit and he doesn't have to worry about the troublesome problem of electricity theft.
Although I earned a little less, I also saved myself a lot of trouble.
If the results are good, he will build more power plants, and it would be best if Lucknow's Sur Electric could also provide its own electricity.
Ron doesn't have to worry about the coal mines and land. The only thing is that investments exceeding 1 billion rupees need to be reviewed and approved by the New Delhi Power Department.
Ron is planning to leave in the next two days. There are many things to do in Uttar Pradesh, and they have all been left to the family to handle.
The construction of Sur Electric in Lucknow, the development of real estate companies, the site selection of power plants, cement plants in Purvancha district, and five-star hotels in Varanasi...
The business was too big. After some calculation, Ron's investment in Uttar Pradesh exceeded 10 billion rupees.
There are still many projects in the early stages. The more time passes, the larger the investment will be, and it will be easy to multiply the money several times.
If we take into account that he will also take over infrastructure projects in Uttar Pradesh in the next few years, the GDP will be even more exaggerated.
The prototype of a giant chaebol is already visible. In a few years, Ron will be able to sit at the same table with Ambani, Tata and others.
Wishes are beautiful, but reality is full of troubles.
In May, after arranging matters in Uttar Pradesh, Ron took Munna to New Delhi.
Well, as the leader of the Progressive Party, Ron decided to take him out to see the world.
That is the political center of India, and Ron has high hopes for Munna.
Munna's family was extremely excited when they heard that he was going to New Delhi.
Muna thought they would scold him for leaving home in anger last time, but they didn't.
After hearing Munna's good news, cousin Pappu was so happy that he forgot his anger.
He was so excited that tears welled up in his eyes. Finally, someone in his family rushed out of the filthy place and headed to Delhi!
"Like Auntie always said, she knew you would succeed."
In the eyes of Muna's family, they don't understand what the leader of the Progressive Party and the Minister of Development of Backward Areas are.
Muna runs around with a group of people all day long, but doesn't bring any benefit to the family.
Are constituency leaders and ministers that important? They still don't carry the weight of New Delhi.
In their eyes, that was a person's greatest success, and the Halwis never left Mirzapur for most of their lives.
Now Munna is going to Delhi, which is the biggest event in Khanna village in decades.
Old Rutu was no longer angry with him. She smiled and pursed her lips with no missing teeth, and spread the news that Munna was going to Delhi.
She wanted him to serve his employer well and send more money home.
Muna was too lazy to explain that the power of the constituency leader was far beyond their imagination.
If he wanted to, he could easily tear down that shack-like home and rebuild it into a concrete house!
He is a minister. Although he is not very important, he is also a well-known official.
In short, Muna was about to leave, and he could even drive his husband to New Delhi himself.
(End of this chapter)
Continue read on readnovelmtl.com
