A familiar story

There was a lot of optimism surrounding the power sector at the start of the 11th five-year Plan, in April. It has taken all of seven months to puncture the optimism, and to recognise that consumers have to be resigned to the prospect of continued slippages in project schedules and generation targets. Though the country had managed just half the target power capacity addition in the 10th Plan (2002-07), causing today's near-decade highs in power deficits, the promise that had been held out was that things would be different in the new Plan because people had learnt from past mistakes. Alas, that does not seem to be the case. In the first six months of the year (and of the Plan), capacity addition has been less than a third of the targeted 10,000 Mw, despite all the Pert (Programme Evaluation Review Technique) charts in the power ministry. The slippage is from all three constituents engaged in constructing power plants - central sector, state sector and private sector. The target capacity addition for the whole year, as a result, is now being scaled down (to 14,000 mw from about 17,000 mw), but industry experts expect more such "corrections" during the course of the year and the ones to follow.

What is wrong? The reasons being given today relate primarily to the shortage of both men and materials. There is, for instance, a severe shortage of construction equipment (cranes and the like) and of construction engineers-even leading companies like Larsen & Toubro find that it is not easy to attract engineers to the construction industry when a more glamorous software sector also beckons. Then there is a shortage of other manpower - skilled and semi-skilled - estimated at about 60,000 people. There is a shortage of equipment per se "" the main boiler-turbine-generator sets, because equipment manufacturers are full up on orders "" as well as the balance-of-plant equipment. There is a shortage of related infrastructure too. The construction of plants is being held up due to the lack of roads to transport large equipment to plant sites, or the lack of port capacity. Much of this has to do with the boom in the construction and capital goods sectors, reflecting a rapidly growing economy, and so the shortages will not ease soon. However, all this was known seven months ago when the ambitious plans were being highlighted; the question then is, what was the optimism of the time based on?

The government's "action plan" in the current situation, as announced a few days ago, revolves around "monitoring" projects. Such monitoring is of course vital because, without that, it becomes impossible to identify the bottlenecks and take corrective action. But it is far from clear whether an altogether new body like the proposed power project monitoring panel needs to be set up for this purpose. After all, there is no shortage of monitoring bodies already in place. There is the power ministry itself. There is the Central Electricity Authority. There is the Planning Commission. If these are not monitoring what is going on, then the question to ask is what one earth they are doing. Some two decades ago, the government even set up an altogether new ministry of programme implementation, which was to do nothing other than monitor. This body, when it was new, used to publicise its findings in the initial burst of enthusiasm, but nothing has been heard of it for years. And any bureaucrat who is sent there thinks it is a dumping ground. Presumably, this ministry too is monitoring the progress of power projects, or the lack of it, and filing periodic reports. In any case, the problem goes beyond the power sector. When the Prime Minister took a review last week of the progress of key government programmes, he found the power story being repeated in virtually any direction that he looked.