The Hindu Business Line : Chidambaram to mediate on power, equipment issues

New Delhi, Nov 6 The Finance Minister, Mr P. Chidambaram, has been roped in to broker peace between the Power and Heavy Industries Ministries in order to ensure cohesiveness in working towards achieving the power generation capacity set for the current Plan period and beyond.

Mr Chidambaram is likely to chair a meeting of representatives from both Ministries on Wednesday to delve on ways to sort out the serious problem of power equipment shortages.

The Prime Minister, Dr Manmohan Singh, had recently mandated the Finance Minister to mediate on the issue, especially in the light of massive slippages in the generation capacity addition targets during the Tenth Plan period and slack progress during the first half of the current fiscal. Officials from National Thermal Power Corporation Ltd, which comes under the Power Ministry, and equipment manufacturer BHEL, which is under the Ministry of Heavy Industries, are expected to attend the meeting on Wednesday.

The meeting is expected to iron out differences between the two Ministries on the placement of bulk orders for NTPC’s upcoming projects based on the new supercritical technology sets to BHEL on a negotiated basis. NTPC’s plans to enter power equipment manufacturing on a commercial level, besides the move by the Power Ministry to encourage international players, including Italian firm Ansaldo, Czech Republic’s Skoda Power and South Korea’s Doosan Heavy Industries to set up manufacturing facilities here, are also likely to feature in the deliberations.

Bulk orders

BHEL is currently in the process of absorbing technology for manufacturing sets based on the supercritical technology and has tied up with Alstom of France and Siemens of Germany for this. BHEL wants bulk orders for supercritical technology-based projects to be given to it on a negotiated basis in order to sufficiently absorb and indigenise the technology upon executing a certain minimum number of projects.

Both the Power Ministry and NTPC had earlier singled out “delays” in equipment supply by BHEL as among the major reasons for achieving slightly over 50 per cent of the 41,000 MW target set during the Tenth Plan period. The Ministry has been strongly pushing NTPC’s proposed foray into equipment manufacturing. BHEL, on the other hand, dismissed the allegations and cited bunching of orders during the last couple of years of the Plan period as a reason for the demand-supply mismatch.

The Centre has set a target of 78,577 MW for the current Plan period. As against a target of adding 10,159 MW during the first six months of the current fiscal (2007-08 being the first year of the Eleventh Plan period), projects totalling only 2,645 MW have materialised, a shortfall of 7,514 MW, or 74 per cent of the target, according to the Government’s latest estimates.