The power ministry has set up a mega advisory panel comprising industry heavyweights, heads of banks, financial institutions and power Public Sector Undertakings (PSUs) and other experts to thrash out issues hurting reforms in the sector. The move comes at the backdrop of power companies sending distress signals as fuel supply issues and high interest rates have taken a toll on profit margins and fresh investments.
The panel is headed by power minister Jyotiraditya Scindia. Members include Tata Group Chairman Cyrus Mistry, ADAG Chairman Anil Ambani, Torrent Group Chairman Sudhir Mehta, GMR Group Chairman G M Rao, Kalyani Group Chairman Baba kalyani, JayPee Group Chief Executive Officer (CEO) Manoj Gaur, State Bank of India Chairman Pratip Chowdhury, ICICI Bank Managing Director (MD) & CEO Chanda Kochhar, McKinsey & Co Partner Vivek Pandit and Chairmen of Powergrid Corp and Bharat Heavy Electrical Ltd (BHEL).
Other members include Feedback Ventures Chairman Vinayak Chatterjee, TERI Director General R K Pachauri, former power secretary R V Shahi, former Coal India Chairman P K Sengupta, former environment secretary Vishwanath Anand, Independent Power Producers Association (IPPAI) Director General Harry Dhaul and Association of Power Producers Chairman (position changes annually, currently held by Gautam Adani).
Power secretary P Uma Shankar and Central Electricity Authority (CEA) Chairman A S Bakshi are members representing the ministry. The panel will have its first meeting on 18 February. “The issues that the group should discuss include shortage of coal and gas for power plants and the payment related risks that have cropped up in financing projects owing to an unhealthy distribution sector,” a member of the panel told Business Standard, requesting anonymity.
He, however, expressed concern at the constitution of the advisory panel, raising doubts at the rationale behind its representation. “Two major players Lanco and Adani have no representation on the panel. Adani’s capacity is fast surpassing other companies. Also, While Powergrid Chairman & Managing Director (CMD) is a member, NTPC CMD is not. Further, CESC from Kolkata is not a member. This means there is no representation from the eastern region,” he said.
The power ministry denied that there are issues with representation of the panel. “It is a very well balanced representation. It represents different segments of the sector,” power secretary P Uma Shankar told Business Standard. According to the finance ministry, the total quantum of loan sanctioned by PSU banks for generation is around Rs 3.4 lakh crore at the end of March 2012. In addition, Power Finance Corporation (PFC) and Rural Electrification Corp (REC) have taken exposure of Rs 1.15 lakh crore on thermal generation alone.
Private industry gave a thumbs-up to the initiative. "We hope it will lead to resolution of many issues which are plaguing the sector today, specially the fuel shortage which has threatened the viability of the sector," Ashok Khurana, Director General of APP said.
