Apex industry body ASSOCHAM today called for an urgent intervention by the Prime Minister and sought a multi-front government action to break down all hurdles of coal supply to power units and improving the financial viability of power utilities, in wake of the several thousand MW (30,000 MW) of generation capacity lying idle in Central, private and state sectors while almost entire country is suffering from prolonged power outages and industries are forced to declare holidays due to non availability of power.
The Associated Chambers of Commerce and Industry of India said that with the RBI move to block further finances to the power sector which has over INR 1.19 lakh crores liabilities to the banks, and the states owned power utilities accumulating losses after losses, it is feared that the power sector is headed for severe crisis more so as the government had designated 2012 as the “Power for all year.”
In a detailed presentation to the government, ASSOCHAM listed that as much as 6,000 MW of existing capacity of the largest power PSU, NTPC, was idle and another huge 26,000 MW capacity “barely working” due to non-availability of coal. In addition both states and private sectors are holding on to power projects that are dud babies due to revenue losses and lack of coal or gas fuel. In the national capital alone a fully operational 750 MW plant is idle for want of gas fuel. Fate of another 14,715 MW of capacity is hanging in the balance.
Calling for reconsideration of Coal India Limited monopoly in coal mining, removing all hurdles to private sector power generation, privatising power distribution and bold steps towards tariff rationalization, ASSOCHAM said the present situation was extremely worrying. While the Power Ministry claims the highest annual addition to capacity at 19,459 MW, more than what was achieved in the five years of the 10th Plan, the entire country was groaning under power cuts.
“The after effect of this paralysis in the Power sector is that industrial production is rapidly decelerating, input costs are rising as captive diesel generator power costs more than twice the grid electricity charges and all this is adding to inflationary situation from the supply side besides resulting in large scale job and wages loss to the workers.” The cumulative effects are already visible and would further depress GDP growth when the results of this quarter are made available, said the chamber. It feared that bureaucratic hurdles were dissuading private sector from pushing ahead with larger role in the sector.
In its analysis ASSOCHAM said it was “tragic” the Power Ministry, the Environment Ministry and the Coal Ministry were sharply divided over the terms of assured coal supply and working of more mines and India has to import 70 million tonnes of coal at an exorbitant price while sitting on 100 billion tonnes of coal reserves.
Major problem was with the mining monopoly for the public sector CIL which is not prepared to guarantee supplies nor curb illegal mining that is reportedly estimated to be as high as six per cent of the production from its own mines and that too of the best quality coal, with the Environment Ministry further complicating it by sticking to its rules and delaying final clearances for projects.
Source - ASSOCHAM
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