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Government falls short in putting power projects on track

Government falls short in putting power projects on track
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First Published: Fri, Mar 09 2007. 01 44 AM IST
Updated: Fri, Mar 09 2007. 01 44 AM IST
New Delhi: Almost 44% of the power-generating capacity that India hoped to add between 2002 and 2007 wasn’t added, for reasons ranging from the inability of project developers to achieve financial closure, to the tardiness of power-equipment major Bharat Heavy Electricals Ltd. (Bhel) in acquiring “super-critical” technology for boilers and turbines.
These findings are part of a working group report prepared by the power ministry in the run-up to drafting the 11th Plan (2007-12).
According to the 10th Plan targets, between 2002 and 2007, power projects with a capacity of 41,110MW were to come up around the country; not all of them did, resulting in a shortfall of 17,860MW. “A total of 12,516MW will not come up in the present Plan (2002-07) on account of geological surprises, natural calamities, court cases, law and order problems, relocation and resettlement (R&R) issues among others,” the report says. It adds that 60% of the shortfall arises from the non-commisioning of thermal power plants and 40% from delays in hydroelectric power projects.
When contacted, a senior Bhel executive said: “This is not true. (A) technology tie-up was not a mandatory requirement for tendering for the projects. We had given the deed of joint undertaking and we had qualified to bid for the projects. The technology was later tied up.”
Power shortages are identified as one of the key infrastructural bottlenecks threatening India’s economic growth. The report also points out that one of the main reasons for the delay in hydro power projects was caused by the time needed to prepare a detailed project report (DPR), required for both regulatory and financial clearances.
“Inspite of the huge planning exercise that takes place while fixing up the Plan targets, it is very surprising that such huge gaps still remain at the implementation level. Either the Plan target was over-stated or the implementation was flawed. Some accountability needs to be fixed,” said Kuljit Singh, partner at audit firm Ernst & Young.
Delays in investment decisions and financial closure were responsible for 2,900MW not being commissioned. That problem will likely continue in the 11th Plan period too. India hopes to add 68,870MW of generating capacity between 2007 and 2012 (the current installed capacity is 128,182 MW). This will require an investment of Rs10,31,000 crore; the report expects there to be shortfall of Rs451,000 crore in this. “The shortfalls have become a consistent feature after the end of every Plan period, only their quantum have progressively increased,” Singh added.
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First Published: Fri, Mar 09 2007. 01 44 AM IST