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No plan to cap merchant power tariff, says Shinde

No plan to cap merchant power tariff, says Shinde
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First Published: Wed, Aug 19 2009. 10 23 PM IST

 Encouraging participation: The power minister says the country needs to add more capacity and will offer further incentives to private firms. Ramesh Pathania / Mint
Encouraging participation: The power minister says the country needs to add more capacity and will offer further incentives to private firms. Ramesh Pathania / Mint
Updated: Wed, Aug 19 2009. 10 23 PM IST
Mumbai: The government has no plan to cap the tariffs or withdraw tax breaks on merchant power, or surplus electricity that producers are allowed to sell in the open market, power minister Sushilkumar Shinde said in an interview, responding to news reports that the government was considering such a move. Edited excerpts:
Encouraging participation: The power minister says the country needs to add more capacity and will offer further incentives to private firms. Ramesh Pathania / Mint
What is your view on merchant power tariffs? A lot of private companies, and even public sector companies, going forward look at this as a very critical determinant of their profits. Does the government have any plans to cap merchant power tariffs in the future at all?
Open access has been allowed and we do not want to cap it at this moment because the country needs power and we want more and more capacity addition.
So no question of capping tariffs in the next few years?
Yes, at the moment, there is nothing because we want more people to come in and we have allowed open access, we have (power trading) exchanges also. Two exchanges are already in existence. So, all the creations are because we want more and more private entrepreneurs should come in the race.
There is just one other note of apprehension that even if you don’t cap merchant tariffs, you may withdraw some of the income tax benefits which are extended to merchant power. Is that likely at all?
No, (a) few things have been brought to my notice and wherever there have been some difficulties, we have already taken it up with the finance ministry and the finance minister, Pranab Mukherjee, is aware of everything. He is very sympathetic on all these things. I think on this sector, the investors and developers should not worry on these counts. They will be getting much more incentives in future also.
On Tuesday, you spoke about how hydroelectric power production might be affected in the near term. Could you give us some details on how much hydropower production might come down by?
Because of the rain situation this year, there is likelihood of some slippages because we have to consider nature too. Nature has not permitted us to go ahead and, thereby, in totality I had said that out of 78,000MW (of planned capacity addition in the 11th Plan period), there might be some slippages of 6,000-7,000MW. There are some slippages on water scarcity, fuel and on gas.
You spoke about a fairly aggressive 100,000MW target for the 12th Plan, how much of this will come from the jewel in your crown—NTPC Ltd?
Yes, this entire document is available. Yesterday (on Tuesday), we circulated (the document) and this 100,000MW (target) that has been put in (it) before the stakeholders... I have suggested, and I have requested, that if anybody wants to change or to suggest something, we will include it in our Plan documents.
To execute this, NTPC would need gas. What is it doing about that? What is the latest and what is your stance on what is going on with Reliance Industries Ltd (RIL)?
Now, we have got gas. The two disputed projects, we have not taken in because the case is going on in the Bombay high court and, thereby, this Kawas and Gandhar (in Gujarat) the only two projects have been kept aside and the rest, now the gas is being supplied and we are making use of that gas.
But Kawas and Gandhar are also projects which will add a significant amount of capacity...
They are working at the moment, they are not idle. But we do not want to take this disputed gas on for these two units because the matter is in the court.
Will you move a higher court in the NTPC dispute to resolve it speedily?
No, my corporation is capable to take decision and...with the corporation and the board of director will take (a) decision on this count.
Is NTPC leaning towards filing a special leave petition with the Supreme Court very soon?
That is not yet decided.
What is the conversation that is being thrown up between you and the oil and gas ministry on this particular matter?
There was no discussion between us and the oil and gas ministry as of today, but we are concerned only about our dispute.
We do not want to get involved in the big disputes that the petroleum ministry and oil companies are having. We do not want to become a part of it. We are concerned only with the NTPC problem.
cnbctv18@livemint.com
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First Published: Wed, Aug 19 2009. 10 23 PM IST