Remember Dabhol?-Ultra Mega Power Projects Don’t
In the ongoing silly season at the Indian power ministry, a clutch of prestigious power projects have been announced to putatively rev up generation when government has barley washed off its hands and money from debacle of Dabhol power plant.
And never mind the rampant power leaks and widespread thefts in supply and distribution of state run power sector, where losses making state electricity boards are the norm. Continuing chaos in power distribution, outdated power policy and draconian power laws are at odds with persistent enthusiasm to coagulate funds for power generation. Meanwhile, the rate of return on investment is now to minus 28%. Commercial losses add up to Rs25, 000 crores per annum courtesy theft and open-ended subsidies doled so frequently by political power hungry politicians. Transmission and pilferage loses remain almost 35% pan –India with finances of state power utilities going downhill. So naturally there exists a huge investment backlog.When power ministry should have slogged over power reforms, especially in distribution, it has instead concentrated its energies in garnering private investment in power generation that too in absence of any clear-cut and transparent policy framework. Such a strategy has merely meant avoidable controversy- bailouts and power shortage. Remember Dahbol and recent electricity subsidy by Delhi government. Reportedly, the four initial mega power plants of up to 10,000 mw each would be set up via competitive bidding route. In any case the current high transmission ad distribution losses and the real risk of payment default would short –circuit and not shore up private investor confidence.