A K Bhattacharya: What about the power promise?

RAISINA HILL

The commitments to meet the shortfall in power capacity are unlikely to be fulfilled.

Even a few months ago, there was considerable hope that India's power sector will be able to at least partially meet the shortfall in the generation capacity that the Tenth Plan was committed to have created by March 2007. The government was putting out numbers on the power generation capacity to be added in the first year of the Eleventh Plan, primarily because several power projects scheduled to be completed within the Tenth Plan period had spilled over to 2007-08.

With the first half of 2007-08 coming to a close, there are now unmistakable signs that those promises are not likely to be fulfilled. There will be further delays in the execution of many of those projects. With over 78,000 mw of new generation capacity slated to be added in the Eleventh Plan ending March 2012, there is every possibility of the backlog of planned and unexecuted power projects increasing even further, making a mockery of the planning process and questioning the sanctity of setting targets.

Don't forget that the Tenth Plan target of adding 41,000 mw of generation capacity has already become a joke as only a little more than half of that promised figure was achieved by March 2007. With no visible change either taking place or being promised in the system of planning and executing power projects, what chance does one really have of meeting the Eleventh Plan target of adding 78,000 mw of new capacity?

The peak power deficit (the difference between peak demand and the power available during that time) has already begun widening. Against 12.8 per cent in April-August 2006, the peak power deficit in the same period of 2007 was higher at 13.4 per cent. Captive power generation is on the rise, adding to the infrastructure costs of manufacturers and service providers. Eventually, all these weaknesses in the system will adversely affect the Indian economy's competitiveness and GDP growth.

The irony is that several initiatives were indeed taken in the last couple of years to get the country out of the prevailing power sector woes. The much-talked about ultra mega power projects have been launched. There are teething problems in these projects, but the ones in Mundra in Gujarat and Sasan in Madhya Pradesh seem to be on course. But the benefits arising out of these projects will not accrue during the Eleventh Plan period. Half a dozen more such ultra mega power projects have been planned. But these are yet to be finalised. So, no immediate help can be expected from these projects.

On the regulatory side, the government is yet to decide on who should head the Central Electricity Regulatory Commission (CERC), the apex power sector regulator. Since the completion of the five-year tenure of Ashok Basu last year, the government has not yet named his successor. A few names have been shortlisted, but the government does not seem to be confident to go ahead with the announcement of the candidate it wants to head CERC.

Even within the power ministry, the earlier drive to tackle the power sector problems on a war footing is missing. With Ashok Basu as CERC chairman and R V Shahi as power secretary, not a day would pass without some excitement. While Basu was busy laying down the guidelines that power sector players must honour, Shahi spent much of his time devising ways to add power generation capacity at a faster pace. There were controversies, with the power ministry trying to lay down the tariff policy and the CERC making no secret of its opposition to such a move. There was, however, a sense of urgency about reforming the power sector and tackling the problems afflicting the country's power sector.

In sharp contrast, the power ministry today seems to be content doing just a maintenance job. A capacity addition of about 51 per cent of the target in the Tenth Plan period has not yet stirred the ministry to some action to prevent a repeat in the Eleventh Plan. The need of the hour is to implement new initiatives at great speed since the challenges of creating more capacity are huge by any yardstick. And everyone in the power sector is realising that Sushil Shinde as power minister is no better than his predecessor, P M Sayeed.