Skip to main content

Indian industry feeling Modi govt heat? Opposes move to provide competitive advantage to PSU power cos

By Our Representative
Has the Indian industry begun to come off its shell, beginning to see that something is fundamentally wrong, detrimental to its interests, with policies adopted by the Government of India (GoI)? It would see so, if the latest move by the Association of Power Producers (APP), is any indication.
APP, significantly, is the apex body of the country’s top industrial houses, ranging from Adani and Tata to Reliance (Anil Ambani) and Torrent, all of them so far considered pro-Narendra Modi, and involved in power generation.
In a strongly-worded letter to Union minister for power and new & renewable energy Raj Kumar Singh, APP director-general Ashok Khurana has said that the GoI has come with a “very regressive provision” in order to protect state-sector power generating stations from competition by seeking to “reintroducing the cost-plus regime”.
Calling it “discriminatory” the APP letter warned, the proposed amendment to the Tariff Policy 2016 would have “wide-ranging impact on investments in power Sector, especially in generation segment”, pointing out, it would mean that “now only private generators would be subjected to competition.”
The Tariff Policy, 2006 had stipulated all future requirement of power were to be procured through competitive bidding, even as providing an exemption to the public sector projects for five years, i.e. till January 2011. The five-year moratorium was particularly advantageous to the National Thermal Power Corporation (NTPC), the Central public sector undertaking (PSU), which has a generating capacity of 53,651 MW.
While NTPC sought the extension of the timeline in 2010, the APP letter noted, “it was as not agreed by the Central Electricity Regulatory Commission (CERC)”, which argued, on the basis of an analysis of NTPC’s 14 projects, that, thanks to the cost plus regime, their tariffs were “significantly lower than regulated tariffs”. The Tariff Policy 2016, as a result, “kept the Central sector generating stations out of the cost-plus regime.”
APP said, “In the last of 8-9 years, all other components of the cost of supply (controlled by government monopolies) have increased by 13% to 300%, while the cost of generation, where private sector contributed significantly during the 11th and 12th plan period (2007 onwards, when UPA was in power) has come down by 21% due to enhanced efficiency of the private sector developers.”
It added, “Despite the fact that cost-plus regime has not led to reasonable and competitive rates, it is surprising that, contrary to the advice of CERC, the Ministry of Power is again proposing to reintroduce this regressive provision.”
Pointing out that “the proposed provision discriminates on the ground of ownership – public vis-s-vis private – to allow public sector projects to enter into power purchase agreement (PPA) under cost plus regime”, the letter insisted, “The cardinal principle of public policy is that all stakeholders should be treated alike.”
Pointing out how NTPC, which is “yet to sign a single competitively bid project”, has already started avoiding competition by entering into joint ventures with states to remain under the cost plus regime”, the letter said, this has already distorted the “competitive landscape.”
In fact, it said, a piquant situation has arisen, where public sector power plants Sholapur and Barh Stage 2, with tariff at Rs 5.30 and Rs 5.68 per unit, respectively, have assured PPAs, whereas private-owned plants willing to sell power between Rs 3.00 and Rs 3.25 per unit are struggling for want of PPAs.

Comments

TRENDING

Green revolution "not sustainable", Bt cotton a failure in India: MS Swaminathan

Counterview Desk
In a recent paper in the journal “Current Science”, distinguished scientist PC Kesaven and his colleague MS Swaminathan, widely regarded as the father of the Green Revolution, have argued that Bt insecticidal cotton, widely regarded as the continuation of the Green Revolution, has been a failure in India and has not provided livelihood security for mainly resource-poor, small and marginal farmers.
Sharply taking on Green Revolution, the authors say, it has not been sustainable largely because of adverse environmental and social impacts, insisting on the need to move away from the simplistic output-yield paradigm that dominates much thinking. Seeking to address the concerns about local food security and sovereignty as well as on-farm and off-farm social and ecological issues associated with the Green Revolution, they argue in favour of what they call sustainable ‘Evergreen Revolution’, based on a ‘systems approach’ and ‘ecoagriculture’.
Pointing out that Evergreen Revol…

Rejoinder: Inescapable to have Central Water Commission as strong technical body in India

By BN Navalawala*
This is with reference to Counterview Blog (December 5, 2018), "Modi govt 'shelves' water reforms report, shows 'no interest' in its recommendations", below mentioned are my comments/observations thereon:
A committee was constituted under the Chairmanship of Dr. Mihir Shah, Former Member, Planning Commission, for restructuring of Central Water Commission (CWC) and Central Ground Water Board (CGWB) for optimal development of water resources in the country in the backdrop of Integrated Water Resources Management (IWRM).

Some Hindu bodies in US defending BJP-RSS' divisive, violent activities: Agnivesh

Counterview Desk Last week, Washington DC saw speakers at a religious freedom roundtable, chaired by the US Ambassador for Religious Freedom, Sam Brownback, express concern over "eroding" space for religious freedom in India. Dr Mike Ghouse, executive director, of the Center for Pluralism in Washington DC, referring to the roundtable, said in an email alert that Indian-Americans have "a moral duty to prevent India from being labeled as a Country of Particular Concern by the United States Commission on International Religious Freedom (USCIRF)".

Karnataka: NGO Akshay Patra "not sensitive" to nutrition demands of school children

Counterview Desk
Well-known civil rights organizations, Right to Food Campaign and Jan Swasthya Abhiyan, have sent a letter to the Union minister of human resource development, the Chief Minister of Karnataka, other concerned ministers and officials of the state expressing concerns regarding the mid-day meal (MDM) to school children, insisting, all contracts to the Akshay Patra for supply of MDM should be immediately terminated.

Preventing childhood deaths: India performs worse than Bangladesh, "equals" Pakistan

By Rajiv Shah
A just-released study, “The Pneumonia and Diarrhea Progress Report 2018”, prepared by the International Vaccine Access Centre (IVAC) at the Johns Hopkins Bloomberg School of Public Health, has identified India among 15 other countries which are still far off the mark in achieving the targets of the Global Action Plan for the Prevention of Pneumonia and Diarrhea (GAPPD).

Rejoinder: Worldwide anxiety post-Fukishima is fading, slowly and steadily

By Dr KS Parthasarathy* 
EAS Sarma, former Secretary, Government of India (GoI) in a letter addressed to Secretary, Department of Atomic Energy (DAE), GoI, stated that, there has been "worldwide anxiety about the consequences of catastrophic nuclear accidents, either due to manual lapses or natural calamities" (Counterview, December 2, 2018)."In the recent years, globally, the pace of growth of nuclear power has escalated in leaps and bounds, causing a great deal of public concern and apprehension."

India's rewritten textbooks talk of demerits of democracy, praise Hitler, underrate Mughals

Counterview Desk
A detailed, 3,800-word review of the books rewritten under directions of the BJP rulers across India since Prime Minister Narendra Modi came to power in May 2014 has suggested that one of aims of the books is to instill a sense of doubt about India’s democratic polity among the country’s young minds. Reviewed in the prestigious US journal, “The New York Review of Books”, in its latest issue (December 6, 2018) by Alex Traub, the scrutiny insists, the effort has also been to paint Indian history from the angle of “Hindu triumphalism”, even as creating “Islamophobia”.

Four children die after poor UP Dalit, Muslim families forced to flee to forest area: PVCHR

Counterview Desk
Peoples’ Vigilance Committee on Human Rights (PVCHR) has said that the forest department police’s crackdown, allegedly without any prior notice, on Dalit and Muslim households in Dakhin Tola, Churk Bazaar, Sonbhadra district, Uttar Pradesh, beating up “children and old people, women, and men in an inhuman way”, has led to “forced displacement, starvation and discrimination”. This has reportedly affected about 350 people.

Modi's PRO, who served previous Congress, BJP CMs in Gujarat with "equal" competence

By Rajiv Shah
A public relations officer (PRO), even as maintaining anonymity, is supposed to “manage” reputation of his or her client, reflecting the client’s views in order to influence opinion and behaviour. A PRO is also known to use, the world over, media and communication to build, maintain, manage and plan publicity strategies and campaigns, even as dealing with enquiries from the public, particularly media, organising promotional events such as press conferences, open days, exhibitions, tours and visits. A PRO is also supposed to final touches to press statements for his or client.

World Bank clarifies: Its 26th rank to India not for universal access to power but for ease of doing business

By Our Representative
In a major embarrassment to the Government of India, the World Bank has reportedly clarified that it has not ranked India 26th out of 130 countries for providing power to its population. The top international banker’s clarification comes following Union Power Minister Piyush Goyal’s claim that India has “improved to 26 position from 99” in access to electricity in just one year.