I am a master in India

Chapter 335 Power Industry
The Indian government is actually encouraging private capital to enter the power industry, as it is almost impossible for the state to cover all residential electricity needs.

The government not only introduced preferential policies for power projects, but also unprecedentedly allowed foreign capital to hold 100% ownership of power companies.

According to the Foreign Exchange Control Act, strict restrictions have been placed on the proportion of foreign investment in other industries, except for the power industry.

This infrastructure project required a huge investment, which local businessmen found extremely distasteful, so the government treated foreign investment as a huge loss.

The Dabo power plant, invested in by Enron, is a product of this era; they just signed an investment agreement with the Indian government last year.

The initial phase of the project reportedly involves an investment of US$30 billion, guaranteed by the Indian government. The Maharashtra Power Authority will purchase electricity at market prices after the Tabo power plant is completed.

The terms were very favorable, and Enron was given ample protection.

At that time, a wave of projects financed and private funds were raised in Asian countries to start infrastructure projects.

The Congress Party also had similar ambitions. They launched a "neoliberal economic plan" at all costs, approving a series of major energy projects that utilized foreign investment and new technologies, hoping to achieve a "great leap forward" in infrastructure as soon as possible.

Ron's decision to invest in electricity came at a good time.

Not only are the review requirements lenient, but there are also a whole host of preferential policies.

Of course, its biggest advantage is that it has free coal mines in Sonbadra, which means that 75% of the fuel cost of thermal power generation is not a concern.

No calculation is needed to know that this deal is a sure thing.

Since Tiraka's death, Sonbadra has been in a power vacuum.

The original gang has fallen apart, with everyone wanting to become the next big boss.

Before it could gain any traction, it was wiped out by Ratan and his men.

This place is intended to be developed into a mining center by the Suer family; how could they allow those small fry to exist here?

As for what will happen to the income of local residents if gangs and various shady industries are gone?
What's there to hesitate about? Suer Mining Company is hiring on a large scale.

“Brother, I will build a manor here, and you will be in charge of Songbadra from now on.”

“Fine.” Ratan waved his hand dismissively. “With me here, no one will dare to act recklessly.”

“Mirzabul is entrusted to my cousin Arian. You two can look after each other if anything happens.”

"Brother, nobody in the East dares to mess with us anymore."

"Being careful won't hurt."

As Ron's business grew, more and more members of his family became involved and assisted him.

Latan has stopped growing his own hemp; the income from that stuff is at most a million or so a year.

The dividends the cement plant gave him last year easily surpassed several times his income from hemp.

This year there will be even more; each company might receive more than 1 million rupees in profit.

This does not include the large cement plant already in operation in Gujarat, or the third cement plant that is about to be built in Sumbadra.

Oh, right, and there's also a power plant.

"Brother, are you really planning to build a power plant?"

"Yes, what's wrong?"

"You know, the people in Pufancha District are all dishonest. It's common for them to default on their electricity bills. What's worse, everyone steals electricity; they simply don't like spending money."

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 outlaws who didn't care whether what they were doing was illegal.

Look at those utility poles in the village; they're covered in haphazardly strung wires like a spiderweb, enough to make your scalp tingle.

This phenomenon has persisted for many years in every household, to the point that many people do not consider it illegal at all, but rather a natural "way of life."

One-third of the electricity delivered to rural areas by the Uttar Pradesh Electricity Authority is stolen by villagers, and electricity theft is rampant.

Ultimately, the problem is that electricity prices are too high. The average residential electricity costs 5-6 rupees per kilowatt-hour, and the total monthly electricity consumption is around 20 kilowatt-hours.

Electricity alone costs more than 100 rupees, which accounts for about 10% to 20% of a rural household's total income.

It's too expensive; farmers in Uttar Pradesh can't afford the high electricity bills.

However, Ron wasn't targeting the rural market; he knew, of course, that the Indians liked to steal electricity.

“I plan to supply electricity specifically to the Lucknow region, which has a population of nearly three million and faces a significant power shortage.”

Lucknow?

"Yes."

"Isn't your power plant located in Sumbadra?" Ratan asked curiously.

"No, the power plant will be located around Lucknow. The power grid there is relatively well-developed, which will save us a lot of grid connection costs."

“But the coal mine is in Sumbadra,” Ratan said, puzzled.

“Power plants don’t necessarily have to be located around coal mines; another option is power consumption centers.”

If Sombadra were a metropolis, then placing the power plant there would be perfectly reasonable. There are readily available fuel resources and a sufficient market for electricity.

Unfortunately, this is the eastern part of Pufancha District, a filthy place. Apart from the towns, the rest of the area is extremely poor.

At this point, Ron had no choice but to place the power plant in the power consumption center and then transport the coal from Sonbadra to the power plant.

“That’s quite a distance, over 400 kilometers,” Ratan said, raising an eyebrow.

“By rail, there is a train from Sumbadra that goes through Lucknow.”

"That lousy train station only has one train a day," Ratan complained.

"The railway bureau agreed to add a special train for us."

"Huh, are those vampires so easy to talk to?"

"He gave me a Rolex a couple of days ago."

"Okay, that makes sense."

"However, they did offer a discount, 100 rupees per ton for freight." The usual market price is 200 rupees per ton, but thanks to Rolex, Ron got a quote that was cut in half.

Since it uses national resources anyway, the amount of freight has nothing to do with the railway bureau.

Ron's foray into the power industry wasn't a spur-of-the-moment decision; he had consulted technical experts who had calculated that the business was definitely profitable.

More than 75% of the operating costs of power plants are on fuel, for example, coal, which costs 800-1000 rupees per ton.

Taking all factors into account, 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, while industrial electricity costs 7-9 rupees.

Looking at the unit price alone, there's not much profit to be made; only after achieving economies of scale can one generate substantial profits.

But Ron's coal is free; he owns all the mines in Sonbadra.

Leaving aside equipment, the costs of a power plant are roughly transportation, labor, and equipment depreciation.

Upon closer examination, the power plant he built only cost 1-2 rupees per kilowatt-hour.

The cost was outrageously low; he had no reason not to do it.

Look, in Uttar Pradesh, the profits from collusion between officials and businessmen far exceed what most people can imagine.

Ron plans to first build a small to medium-sized power plant with a generating capacity of around 100 megawatts.

Considering the 45% thermal efficiency of coal, the power plant can output up to 4.32 million kilowatt-hours of electricity per month.

This certainly doesn't mean that all 4.32 million kilowatt-hours of electricity can be effectively transmitted.

We also need to consider grid connection losses and other losses, so the actual amount of electricity put into the market is about 3 million kilowatt-hours.

Combining residential and industrial electricity consumption, Ron's power plant earns a profit of 5-6 rupees per kilowatt-hour.

Wow, a 100-megawatt power plant can easily earn 15-18 billion rupees a month.

This is the exorbitant profit the power industry makes after monopolizing coal energy.

However, the profits are very attractive, and the money invested in this project is worth its huge returns.

Conservative estimates suggest that building such a power plant would require an investment of at least 25 billion rupees.

70% of the funds will be used to purchase generator sets and construct power transmission networks.

This doesn't even take into account the impact of land, coal, and taxes. Without government connections, few businessmen have the resources to enter the power industry.

The business is still in its early stages; Ron has just reached a preliminary agreement with Lucknow.

The two parties agreed that once the power plant is built, the Uttar Pradesh Electricity Authority will purchase the electricity for 5 rupees.

This means that with the government backing him up, Ron is guaranteed to make a profit, and he doesn't have to worry about the troublesome issue of stealing electricity.

Although we earned a little less, we also avoided a lot of trouble.

If things go well, he will build more power plants, and ideally, Lucknow's Sull Electric will be able to solve its own electricity needs.

Don't worry about the coal mines and land, Ron. The only thing that needs to be approved by the power department in New Delhi is an investment exceeding 10 billion rupees.

Ron plans to set off in the next couple of days. There are many things to do in Uttar Pradesh, which he has left to his family to handle.

The construction of the Lucknow Sole power plant, the development of real estate companies, the site selection for the power plant, the cement plant in the Pufancha district, the five-star hotel in Varanasi…

The operation has become too large; a quick calculation shows that Ron's investment in Uttar Pradesh has already exceeded 10 billion rupees.

Even so, many projects are still in their early stages, and the investment will increase as they go on, easily multiplying several times over.

If we consider that he will also take over infrastructure projects in Uttar Pradesh in the next few years, the GDP will be even more staggering.

The beginnings of a giant conglomerate are already visible. In a few years, Ron will be able to sit at the same table as Ambani, Tata, and the others.

The wish is beautiful, but the reality is full of hardships.

In May, after settling matters in Uttar Pradesh, Ron took Muna to New Delhi.

Well, as the leader of the Progressive Party, Ron decided to take him to broaden his horizons.

That was the political center of India, and Ron had high hopes for Muna.

Muna's family was extremely excited when they heard that he was about to go to New Delhi.

Muna had expected them to yell at him for leaving home in a huff last time, but they didn't.

After hearing Muna's good news, his cousin Pap was so happy that he forgot he was angry.

He was so excited that tears welled up in his eyes; finally, someone in his family had escaped the filth and gone to Delhi!
"Just like my aunt always said, she knew you would succeed."

Muna's family doesn't understand what a Progressive Party leader or Minister for the Development of Backward Regions means.

Muna spends all day running around with a group of people, but brings no benefit whatsoever to the family.

Are constituency chairmen and ministers really that important? They don't carry the weight of New Delhi.

In their eyes, that was a man's greatest success; the Harveys had spent most of their lives without ever leaving Mirzabur.

Now Muna is going to Delhi, which is the biggest event in Kana village in decades.

Old Rutu was no longer angry with him. She smiled and pursed her toothless lips, spreading the news everywhere that Muna was going to Delhi.

She hoped he would serve his employer well and then send more money home.

Muna didn't bother to explain that the power of the constituency leader far exceeded their imagination.

If he wanted to, he could easily tear down that shack-like house and rebuild it into a cement house!

He was a minister, though not a very important one, he was still a high-ranking official.

In short, Muna is about to leave, and he can even drive the gentleman to New Delhi himself.

(End of this chapter)