Heavy industry ministry accused of acting as hurdle to power reforms

The power ministry has claimed its heavy industries counterpart is trying to pre-empt the yet-to-be-finalised recommendations of a group of senior ministers, which is looking at issues relating to increasing India's power generation capacity.

This group, set up by Prime Minister Manmohan Singh, includes Finance Minister P Chidambaram and deputy chairman of Planning Commission Montek Singh Ahluwalia.

Official sources said the power ministry has requested the Cabinet Secretariat to "not entertain" a recent note for the Cabinet Committee on Economic Affairs (CCEA) moved by the heavy industries ministry.

The note has sought the CCEA's approval for a bulk order to be placed on Bharat Heavy Electricals Ltd (Bhel) for the first lot of 10 units of 800-Mw super-critical thermal power plants by companies like NTPC Ltd. Both NTPC and Bhel are state-owned public sector entities.

The draft note for the CCEA was first circulated in July 2007 and the power ministry had objected to the proposals at that stage too.

Subsequently in November last, the Committee on Infrastructure, headed by the prime minister, had set up the group of senior ministers that also includes Power Minister Sushil Kumar Shinde and Heavy Industries Minister Santosh Mohan Dev. The group is in the process of finalising its recommendations.

On February 11, the heavy industries department approached the CCEA seeking approval of the order, as well as accepting the provisional price of 800-Mw units on the basis of recent bids for the Krishnapatnam power plant.

It also sought a level-playing field for Bhel by extending benefits available under the mega power policy for the 800-Mw sets that it wants NTPC to buy.

"Moving a Cabinet note at this stage pre-empts the recommendations of the group," the power ministry has said.

It has also pointed out to the Cabinet Secretariat that all matters relating to hydro-electric (except projects below 25 Mw) and thermal power, transmission and distribution projects come under its jurisdiction in accordance with the Allocation of Business Rule, 1961.

"Hence, the proposals contained in the note for the Cabinet Committee on Economic Affairs moved by the Department of Heavy Industries is in contravention of the rule," it said.

The power ministry has also said that it will take necessary action on finalisation of the recommendations by the group constituted by the Committee on Infrastructure.