Corporat Plan Ntpc-Final
Corporat Plan Ntpc-Final
Corporat Plan Ntpc-Final
By S.N.TRIPATHI
PRESENTATION OUTLINE
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) *
Single Window for all New Projects (including hydro) Coordination with Powegrid Multilateral funding Annual Plans
*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,
Involving right people having right skills in the planning Where do we process, want to reach? (our Using right forecasting destination) models/tools
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
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
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.
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
Financial soundness
Customer focus
Agile corporation
Performance leadership
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
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
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Vindh-3 2004
38 37 38 39 48
59
40
50
60
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
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
2000-01
2001-02
2002-03
2003-04
2004-05
Years
1.07*
1.02*
0.98*
0.91*
Man-Mw Ratio
0.71
0.61
0.6
0.56
0.57
0.53
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
45.96
2004-05
Year
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
since APRIL78.
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.
profits. These are all phenomena and characteristics that the World Bank likes to be associated with.
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
Capacity Addition
Diversification
Consultancy Services
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)
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
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
In addition, NTPC would also have some generation capacities in international locations
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
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
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
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
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
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
4. 5.
6. 7.
8.
9.
Manpower requirements
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
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
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
* 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
Region 1 Plan
AUD
L2 plans
NCA
Ops.
HR
Station 1 Plan
AUD
Other
Other
L3 plans
NCA Ops.
HR
Mid-year Review
I II
Quarterly Review
I II III IV
Monthly Review
Apr. May. Jun. Jul. Aug. Sep Oct Nov. Dec. Jan. Feb. Mar
Thank you
Objectives
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
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
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
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.
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
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
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
focus
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
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