The National Thermal Power Corporation is planning to foray into power distribution in a big way, and is in talks with the Karnataka and Gujarat governments for taking over distribution in Mangalore and Baroda.

The thermal power generation utility, which has floated a wholly owned subsidiary NTPC Electric Supply Company Ltd, has about 100 engineers waiting in the wings for the first distribution assignment.

The utility is also exploring the possibility of taking over power distribution in Indore and Gwalior in Madhya Pradesh and Navi Mumbai and Pune in Maharashtra. It was also planning to supply electricity directly to several special economic zones, company executives said.

NTPC had, however, called off plans to take over distribution in Kanpur citing lack of interest shown by the Uttar Pradesh government, a senior company executive said.

NTPC's entry into the distribution business signals fresh competition in the sector, which has so far been dominated by two major private players, Reliance Energy and Tata Power, and to some extent the RPG group. Reliance Energy and Tata Power have also applied for distribution licences for lucrative circles in Maharashtra and Gujarat.

In preparation for its entry into power distribution, NTPC had sent several of its engineers on deputation to Tata Power and Reliance Energy.

It is also providing consultancy services to state electricity boards in circles where the distribution system is being overhauled under the Accelerated Power Development and Reform Programme.

NTPC Electric Supply Company Ltd would, however, mark the utility's full-fledged entry into the distribution business, executives said.

The foray into distribution is in line with NTPC's efforts to ensure forward integration in the power sector and to diversify into unrelated fields from its core competence of thermal power generation.

Apart from distribution, the company plans to get into power trading and fuel supply through a liquefied natural gas venture.