Nalco’s capital expenditure falls by 32pc to $ 190M (approx) for FY 2014

The capital expenditure target of Nalco has been squeezed by 32% to $190M (approx) for the year 2014-15 as a result of repeated failure of this Public Sector Unit in meeting their targeted expenditure in earlier years.

Moreover, the capital expenditure target of National Aluminium Company's (Nalco) has been cut down by a huge 69% to $87M (approx.) from originally estimated amount of $280M (approx.) for the present fiscal, the Interim Budget papers for the year 2014-15 showed. "Plan outlay is mainly meant for Greenfield project and expansion plans, captive coal mine Utkal E, second phase expansion and additions/modification/replacement," it said.

Recently, a Parliamentary Standing Committee on Coal and Steel asked the company as well as its parent, Ministry of Mines, about their "miserable" failure in meeting their targets. A number of reasons were cited by official sources for Nalco not able to meet their targets, including their lack of statutory clearances for its foray into nuclear power sector.

Nalco had formed a joint venture with Nuclear Power Corporation of India for the constructions of Kakrapar power plant’s third & fourth unit having a total capacity of 1,400 MW. The total estimate of the project is $1936M (approx).

In the joint venture, Nalco has 26% stake currently and its equity contribution has to to be $144M (approx.) for that. However, the payment is still held up as they are waiting for government approval. Due to the lack of the government approval Nalco has not been able to meet its capital expenditure targets since last two years (2012-13 & present fiscal). Besides, the company has not been able to slow any noteworthy improvement with its proposed alumina refinery project worth 1 million tonnes per annum in Gujarat despite MECON submitted detailed project report(DPR) in April, 2013. According to sources, the company management hasn’t given the final go ahead to DPR for Gujarat project. This "extra-cautious approach" of Nalco has already led to 55 % escalation in this project’s estimated costs to $1017M (approx.) from the amount of $ 656M (approx.) that was estimated originally, they said.