Jam tomorrow

This is not the first time that glossy presentations which promise a power haven""where deficits give way to surpluses""are doing the rounds. At the beginning of the last five-year plan, a similar rosy scenario was presented by the then power minister, Suresh Prabhu. Now it is the turn of the UPA government to do the same. It talks about a power surplus by 2012""an energy surplus of 5.6 per cent and a peaking power surplus of 0.7 per cent""on the assumption that 78,000 Mw of new capacity will added to the existing capacity. That is almost four times the 20,000 Mw of capacity that was added in the last five years. What has changed and from where is this confidence coming? Surely, the more rigorous project management schedule that the government is putting in place will not by itself do the trick. Nor will aggressive ordering of equipment, if that is actually happening.

While the government claims to have over 49,000 Mw of capacity "under various stages of construction", Bharat Heavy Electricals Ltd, the main supplier of boilers and turbine-generator sets, which are the key components of a power plant, has orders for just 23,000 Mw. Even after assuming that some of the orders may have been placed on overseas vendors""for instance, Tata Power has placed the order for super-critical boilers for its ultra-mega power plant in Mundra on South Korea's Doosan""the 49,000 number is difficult to digest. And the attempt to complete "all" ordering in the next six months is a task which seems next to impossible, given the tack record so far.

And from where is the money to come for the proposed investment? The working group on power for the 11th Plan has estimated an investment requirement of $250 billion (about Rs 10,00,000 crore) for the power sector, including transmission, generation and distribution. This would require huge doses of private sector investment""domestic and overseas. Private investors do not go by glossy presentations. They need to know that they can turn off the switch on a non-paying consumer and find alternate buyers for the power they generate. They need to see open access in operation, rather than as a directive principle. Giving bulk consumers the option of changing their power supplier would ensure discipline on both sides""on the consumer and the supplier. They also need to see the commitment to stopping the large-scale theft of power. Transmission and distribution losses, which include losses due to theft, are at an unpalatable 30-45 per cent, despite thousands of crores of rupees spent on programmes like the Accelerated Power Development and Reform Programme.

Since the government is still in talk mode more than in action mode""unless setting up committees is seen as action""there is good reason for scepticism on the achievability of the capacity addition targets, and mobilisation of the required investment. In the last few hours, the government has announced the plan to set up a power project management board, a task-force on hydro power, a standing group of power ministers and a sub-committee of this standing group to look at financing issues. If the process for action is being initiated now, the scene in April 2012, when the country steps into its 12th five-year plan, is predictable. It will be another glossy presentation, and another promise.