Union power minister Suresh Prabhu today said the government's policy of providing guarantees and counter-guarantees to power projects has proved to be a stumbling block in undertaking sectoral reforms.
"Providing guarantees and counter-guarantees to power projects during the 90s have only delayed power sector reforms in the country," Prabhu said at the signing of a memorandum of understanding (MoU) between the Indian Railways and the National Thermal Power Corporation (NTPC) for setting up joint venture power projects.
Prabhu said guarantees could not be a substitute for structural changes in the system. "Reforms must result in a reduction in the cost of power, an improvement in the quality of power, an increase in the availability of power and commercial viability of the sector," he said. The power ministry had decided to abandon the policy of extending guarantees and counter-guarantees to new projects, and instead, focus on reforming the distribution sector, he added.
The government was attempting to bring about structural changes through a legislation (Electricity Bill, 2001), which would enable a generator to sell power directly to the consumer, the minister said.
Access to the transmission network would be provided on the principles of common access, and power could be procured by paying wheeling charges, he said.
