Faulty power policies trip nation’s growth

UPA’s lack of direction, infighting, populist grandstanding and pre-occupation with mega-scandals have all contributed to the power crisis

The obsession of the Congress-led UPA is well known. It is “economic growth”. They tout it as the remedy for all evils. Being so focused, one would expect that they would give it their all, even if it meant pushing the growth boulder uphill. If growth is the engine they are pushing uphill, then energy or power is the fuel they should have ensured for achieving this unenviable task. They have failed to foresee this and today the nation is reeling in darkness, literally.

Committed to good governance and with foresight, BJP governments have taken multi-pronged approach to improve the power situation in their respective states. Their plans, first to bring in self-sufficiency and later a surplus in power generation, have faced too many hurdles. It is well known that the UPA government’s stepmotherly treatment has affected the development plans of BJP-ruled states.
Karnataka presently is able to service only 6,000 MW power while it requires 7,200 MW. From the central pool, based on agreed formula, Karnataka should receive over 1,720 MW daily. But now for over three years, it receives only 800-1,000 MW. To meet such unexplained reduction in its quota and to serve the growing demand for energy, the BJP government has speedily set up thermal units in Raichur and Bellary areas. Furthermore, to save on coal transportation costs, acquiring land, it set up power plants close to the pitheads in Chhattisgarh’s coal belt. The unit is ready, coal is available, Karnataka and Chhattisgarh can benefit; but no, the coal linkage shall not be given by the UPA government. The stalemate continues for over two years now. Today, if running, these units could have given Karnataka additional 3,700 MW.
The Congress-led UPA is responsible for the power crisis across seven states, including in Andhra Pradesh. This crisis is a direct fall-out of their mishandling of the Telangana issue. The indecision and the trust deficit that the Congress government has created on Telangana have resulted in coal miners joining in the agitation, causing a drastic fall in coal output. The normal daily production from the 50 mines in the Singareni belt is about 1,50,000 tonnes. This has fallen to less than 50,000 tonnes. As a result power production in five power-generating houses, including Ramagundem and Simhadri, has fallen by 60 per cent. It is alleged that in order to meet Andhra Pradesh’s power requirement, which is unfortunately in an undeclared emergency-like situation, power from all over is being pushed to Andhra Pradesh, resulting in a daily congestion in the transmission corridor. This is affecting other states too. As a part of its strategy to meet its regular, recurrent demand, the Karnataka government purchased 200 MW through an open tender from power surplus states. But thanks to the corridor congestion explained above, it receives only 16 MW.
In 2000, at the time of Chhattisgarh’s formation, its installed generation capacity was only 1,360 MW. Today, the state has an installed capacity of 1,924 MW. Drawing its central quota of 800 MW and 300 MW from the private sector, Chhattisgarh comfortably meets its demand for power even when it peaks at 3,100 MW. The state has a zero power-cut policy. In the next five years, the generation capacity will go up to 50,000 MW. In order to achieve this, the state has worked out multi-dimensional strategies. A joint venture with Iffco shall be generating 1,300 MW. Adopting a transparent bidding process, two mega projects of 2,000 MW each, a la Mundra (Gujarat), are underway. As per plan, they should start generating power by 2016. Not only will Chhattisgarh become a power surplus state, it will be the power hub of India.

Ten years ago, in 2001, the Gujarat electricity board was facing a loss of `2,500 crore. With a comprehensive plan, the BJP government addressed both the short- and long-term issues. Immediately, it successfully worked out a downward revision of power purchase agreements. This resulted in a reduction of loss of nearly `500 crore per annum. The government negotiated with banks to reduce interests on loans to electricity companies. Simultaneously, in order to increase thermal power production, a wider mix of types of coal being used was worked out. A significant cut in transmission and distribution loss was obtained by motivating the ground-level staff. Today, Gujarat is a power surplus state. It meets all its demand at 11,000 MW and sells 1,000 MW as surplus. By 2015, after meeting the increasing demand for its own consumption, it expects to sell a surplus of 5,000 MW.
A review of the financial health of power utilities was undertaken in August 2011. Of the 40 utilities in the country, only 11 are making profits. The BJP-ruled states are making sure that their utilities attain good financial health. While all four utilities in Gujarat make profits, one out of five in Karnataka has been turned around.
It was reported that in 2008-2009, losses from 29 utilities were to the tune of `32,678 crores. A study conducted for the 13th Finance Commission warned that if the trend continues, by 2014-2015 the losses will reach `1.16 lakh crores.
There are several “doables” which the Central government can facilitate. Agreements on the supply of coal should be honoured expeditiously and speedily. Coal India’s efficiency has to be improved. Congestion in the inter-state corridor deters both the buyer and seller. Natural gas should be given on priority basis to state power-generating units. NTPC should be encouraged to keep larger stock of coal so that generation does not suffer.
The UPA’s lack of direction, infighting between ministers, populist grandstanding and pre-occupation with mega-scandals have all contributed to the power crisis in a big way. Environment and forest clearances have held back the laying of transmission lines. It is nobody’s case that environment considerations should take a backseat for us to meet our ever-growing demand of power. But should it take years to arrive at a balance between environment priorities and development needs? What degree of accountability prevails in the Cabinet which allows for the stalemate to continue, impacting infrastructure developments?

The writer is spokesperson of the BJP. The views expressed in this column are her own.

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