Power firms pulled up over capacity targets

The power ministry has criticised public sector undertakings for their inability to deploy the funds allocated to them towards meeting the capacity addition target of 41,000 MW for the current Plan period. Central power utilities are likely to miss the target by a sizeable margin.

Power Secretary RV Shahi was particularly critical of the National Thermal Power Corporation (NTPC) and National Hydroelectric Power Corporation (NHPC) because of their failure to spend the funds allocated to them. He was speaking at a seminar on a regulatory framework for the power sector here today.

Shahi said the government had set aside Rs 14,000 crore as equity support for NHPC during the current Plan, up from Rs 4,000 crore during the Ninth Plan. NTPC had been allocated Rs 3,000 crore during the Tenth Plan, he added.

Shahi said more effort was needed to ensure that projects were implemented, and this required a timely award of contracts among other things.

"We are after them to use whatever is provided. We would be happy even if they spend 95-98 per cent of the funds," he added.

The government's programme to increase generation capacity in the current Plan period has started on a dismal note, with a realisation of only 69 per cent of the target in 2002-03, the first year of the Tenth Plan period (2002-07).

Compared to the capacity addition target of 4,087 MW for the last fiscal, only 2,858 MW was commissioned. The Centre is planning to add generation capacity of 5,202 MW in 2003-04, 7,677 MW in 2004-05, 8,218 MW in 2005-06, and a whopping 17,155 MW in 2006-07.

Shahi also said the power ministry had written to both the petroleum and coal ministries for setting up separate regulators for the two sectors as a means of checking fuel costs and ensuring the completion of fuel linkages.

Shahi said by merely containing fuel costs, power tariff could be reduced by 30-35 paise on variable cost.

Shahi sought a convergence of government policy and regulatory approach to reduce overdependence on public resources. He said the government would be unable to support such an expenditure over the long run.

Speaking at the seminar, Central Electricity Regulatory Commission (CERC) Chairman AK Basu said the commission had written to various state electricity regulators for implementing the availability-based tariff (ABT) norms in their respective states. Andhra Pradesh had already taken the first step in this direction, he said.