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

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

Ahmedabad's civic chaos: Drainage woes, waterlogging, and the illusion of Olympic dreams

In response to my blog on overflowing gutter lines at several spots in Ahmedabad's Vejalpur, a heavily populated area, a close acquaintance informed me that it's not just the middle-class housing societies that are affected by the nuisance. Preeti Das, who lives in a posh locality in what is fashionably called the SoBo area, tells me, "Things are worse in our society, Applewood."

RP Gupta a scapegoat to help Govt of India manage fallout of Adani case in US court?

RP Gupta, a retired 1987-batch IAS officer from the Gujarat cadre, has found himself at the center of a growing controversy. During my tenure as the Times of India correspondent in Gandhinagar (1997–2012), I often interacted with him. He struck me as a straightforward officer, though I never quite understood why he was never appointed to what are supposed to be top-tier departments like industries, energy and petrochemicals, finance, or revenue.

PharmEasy: The only online medical store which revises prices upwards after confirming the order

For senior citizens — especially those without a family support system — ordering medicines online can be a great relief. Shruti and I have been doing this for the last couple of years, and with considerable success. We upload a prescription, receive a verification call from a doctor, and within two or three days, the medicines are delivered to our doorstep.

Powering pollution, heating homes: Why are Delhi residents opposing incineration-based waste management

While going through the 50-odd-page report Burning Waste, Warming Cities? Waste-to-Energy (WTE) Incineration and Urban Heat in Delhi , authored by Chythenyen Devika Kulasekaran of the well-known advocacy group Centre for Financial Accountability, I came across a reference to Sukhdev Vihar — a place where I lived for almost a decade before moving to Moscow in 1986 as the foreign correspondent of the daily Patriot and weekly Link .

Environmental report raises alarm: Sabarmati one of four rivers with nonylphenol contamination

A new report by Toxics Link , an Indian environmental research and advocacy organisation based in New Delhi, in collaboration with the Environmental Defense Fund , a global non-profit headquartered in New York, has raised the alarm that Sabarmati is one of five rivers across India found to contain unacceptable levels of nonylphenol (NP), a chemical linked to "exposure to carcinogenic outcomes, including prostate cancer in men and breast cancer in women."

Dalit rights and political tensions: Why is Mevani at odds with Congress leadership?

While I have known Jignesh Mevani, one of the dozen-odd Congress MLAs from Gujarat, ever since my Gandhinagar days—when he was a young activist aligned with well-known human rights lawyer Mukul Sinha’s organisation, Jan Sangharsh Manch—he became famous following the July 2016 Una Dalit atrocity, in which seven members of a family were brutally assaulted by self-proclaimed cow vigilantes while skinning a dead cow, a traditional occupation among Dalits.

Tracking a lost link: Soviet-era legacy of Gujarati translator Atul Sawani

The other day, I received a message from a well-known activist, Raju Dipti, who runs an NGO called Jeevan Teerth in Koba village, near Gujarat’s capital, Gandhinagar. He was seeking the contact information of Atul Sawani, a translator of Russian books—mainly political and economic—into Gujarati for Progress Publishers during the Soviet era. He wanted to collect and hand over scanned soft copies, or if possible, hard copies, of Soviet books translated into Gujarati to Arvind Gupta, who currently lives in Pune and is undertaking the herculean task of collecting and making public soft copies of Soviet books that are no longer available in the market, both in English and Indian languages.

Boeing 787 under scrutiny again after Ahmedabad crash: Whistleblower warnings resurface

A heart-wrenching tragedy has taken place in Ahmedabad. As widely reported, a Boeing 787 Dreamliner plane crashed shortly after taking off from the city’s airport, currently operated by India’s top tycoon, Gautam Adani. The aircraft was carrying 230 passengers and 12 crew members. As expected, the crash has led to an outpouring of grief across the country. At the same time, there have been demands for the resignation of Prime Minister Narendra Modi, Home Minister Amit Shah, and Civil Aviation Minister Venkaiah Naidu. The most striking comment came from BJP MP Subramanian Swamy, who stated : "When a train derailed in the 1950s, Lal Bahadur Shastri resigned. On the same morality, I demand PM Modi, HM Amit Shah, and Civil Aviation Minister Naidu resign so that a free and fair inquiry can be held. All that Modi and his associates have been doing so far is gallivanting, which must stop." Amidst widespread mourning, some fringe elements sought to communalize the tragedy. One post ...

Revisiting Gijubhai: Pioneer of child-centric education and the caste debate

It was Krishna Kumar, the well-known educationist, who I believe first introduced me to the name — Gijubhai Badheka (1885–1939). Hailing from Bhavnagar, known as the cultural capital of the Saurashtra region of Gujarat, Gijubhai, Kumar told me during my student days, made significant contributions to the field of pedagogy — something that hasn't received much attention from India's education mandarins. At that time, Kumar was my tutorial teacher at Kirorimal College, Delhi University.

Search This Blog