Comments
Giving free electricity to 1.75 crore below poverty line households is not easy. And who would know this better than the Power Minister, Mr Sushil Kumar Shinde.
Fuel supply constraints coupled with poor equipment availability has been a major challenge for his Ministry. Sharing his thoughts with Business Line on six years of his journey in the Ministry, Mr Shinde said that offering a level-playing field for all stakeholders is the mandate set by him.
BHEL's monopoly threatened
The country's power equipment manufacturing capacity was very low, thus we were not able to meet targets. BHEL alone was not able to meet the demands. On the Ministry's initiatives, six new joint venture companies — L&T-MHI, Bharat Forge-Alstom, Ansaldo-GB Power, Toshiba-JSW, Thermax-Babcock & Wilcox, and BGR with Hitachi – are setting up their base in India. Doosan is also putting up a facility in India with 100 per cent FDI.
The orders are now being given through the competitive bidding process. Though we are giving preference to BHEL, it has to participate in the bidding rounds. If BHEL comes second or third in the bidding process, it will have to match the lowest bidder. That is the procedure. BHEL was also given preference in bulk tendering.
Fuel Issues
Others (suppliers including Coal India) were not keeping pace with our progress. While we were running so fast, the others were watching. They felt that growth will be slow. But, from 5,000-10,000 mega watt (MW) capacity addition a year earlier, suddenly, we went to 21,000 MW in 2011-12.
The growth was because of large private participation. This led to higher demand for fuel, while supply was not enough. Gas, in fact, is not available. Had gas been available, in the mid-term appraisal, I could have easily done 62,000 MW instead of 55,000 MW. It is because of supply constraints (gas and coal) that I could not add more capacities. However, fuel linkages for 12{+t}{+h} Plan projects have been done. That is the work that we have done very minutely. So there is no problem.
Supply Pacts
Since the last two years, we have been asking for an increase in coal supplies. Finally, the Prime Minister had to tell the supplier (Coal India) to increase production by five per cent. It is because of his directive that fuel supply agreements have been signed from 2009. There will be no problem now. They have been asked to increase production, and they are doing so now.
Issues on FSA
These are teething problems. Everyone is worried, including the Coal Ministry. Problems can be worked out. The PMO is also looking at them. The penalty is there to put more pressure, so that they can work hard. Otherwise there is no need (for the penalty cause).
Capacity addition target
After doing hard work, I do not want somebody to say that we have not achieved the target. We want a realistic target. And this is what we have been telling the Planning Commission. Now, they (Planning Commission) have to consider the ground reality and only then fix the targets.
For instance, we have been saying that for the 12th Plan, capacity addition should be 75,785 MW based on the ground reality. (For the 11th Plan, the capacity addition was 54,964 MW versus the target of 78,000 MW.)
UMPP Policy
There have been some issues. We are planning to make the document more flexible in the 12th Plan. Considering the position of imported coal and what happened to Tata Power's Mundra project, we will have to change our rules. We just cannot keep sitting like bureaucrats. International prices (of coal) have gone up. So we are finding some way out (for Mundra project). There should not be any loss to the developer or consumer.
Use of surplus coal
The issue has been decided by the Group of Ministers. Sasan (of Reliance Power) will follow the GoM's decision. Henceforth, any such decision will be based on the new policy on surplus coal currently being formulated by the Coal Ministry.
Monitoring mechanism
Accountability is the key. I have appointed an advisory committee which monitors all projects, reviews the status. This entire group sits together every month. That is the reason we saw 21,500 MW coming in the terminal year of 11{+t}{+h} Plan.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.