Jairam Ramesh, Minister of State for Power, tells Sudheer Pal Singh that public-private partnership is the way ahead for the power sector. Excerpts:
What are the major issues that the power sector faces?
I came here with three clear objectives. First, to expedite the pace of capacity addition in 2008-09. Second, to empower the public sector companies as they are crucial. Third, technology improvement. Seeds have been planted, there have been some successes...but there is a long way to go.
Can you name some of the successes?
In capacity addition, we had for the last 25 years adopted a completely bogus definition of commissioning. If a plant was synchronised on oil, it was declared as commissioned. In 2007-08, about 6,620 Mw of coal-based capacity was declared commissioned. But roughly 58 per cent of this had not reached the commercial operation stage. Now commissioning means a plant attaining commercial operations. Today, the public sector is hamstrung, particularly NTPC and BHEL, which are the two giants (of the sector). Vigilance procedures are such that they are not able to take decisions quickly. So I organised a major interaction with the Central Vigilance Commission. Now BHEL has introduced a new works policy that allows for greater delegation of financial powers to site managers. The power ministry has so far had a private sector mindset and the public sector has not been given the importance it deserves. I am not a votary of public sector monopoly but I believe that in many areas the public sector will continue to play a very important role and we need to liberate it.
On one hand, you criticise BHEL for delays in delivering equipment and on the other, you propose local manufacturing laws.
Domestic manufacturing is a very big issue. During the 11th Plan period, of about 79,000 Mw (equipment), almost 16,000 Mw is to be imported from China. This is not conducive (to our growth).Every country insists on local manufacturing. In China, you cannot sell unless you manufacture locally. Why can’t India have the same policy?
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We should leverage our volume to promote domestic manufacturing, which will build domestic engineering capacity.
But the argument that people make is that we need to ensure availability of faster, cheaper and quicker products.
Domestic manufacturing will impose additional costs and time, and that’s the price the country has to pay.
Are you saying that if we don’t impose domestic manufacturing, over a period of time, our domestic industry will die?
Yes.
What progress have you made in terms of bringing out a policy on domestic manufacturing?
We are trying. There is a big import lobby.
How long will it take to introduce the policy making local manufacturing a pre-condition to sell in the country?
I’ve been telling Power Grid Corporation and NTPC, which are going in for high capacity additions, that they insist on domestic manufacturing. The Central Electricity Authority (CEA) is looking at ways to introduce domestic manufacturing. There are more commission agents in the country than there are manufacturers. That’s the problem.