If Reliance Energy is winning the bid for the Krishnapattnam ultra mega power project at a tariff quote of Rs2.336 per unit, this seems to defy the government’s logic that it was rising coal prices in the global market that kept away a large number of bidders. Pertinently, while coal price trends were cited to justify the participation in the bid process limited at three bidders, after the Reliance bid was made public, the government found the rate a competitive one for consumers, after all.
The real reason for the lukewarm response seen in Krishnapattnam—especially the absence of international bidders—lies elsewhere.
It lies in the unacceptably slow pace of reforms in the sector. And calls for getting back to the basics. Far more urgency is needed in efforts to reduce the considerable technical and theft-related losses in distribution, and to ensure their payment security if we want to attract more private power producers.
And populism, an inevitability today, must be paid for by the state, not investors.