The Hindu : Other States / Maharashtra News : Free power worsens situation in Maharashtra

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Friday, Dec 24, 2004

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Other States - Maharashtra

Free power worsens situation in Maharashtra

MUMBAI, DEC. 23. While free electricity to farmers could have paid dividends for the ruling Congress-NCP combine in the Assembly elections, the power situation in Maharashtra in 2004 worsened with deficit touching 3,000 MW, made grave by no definite signs of capacity addition in the near future and no solution to the stalled Dabhol project.

The Congress-NCP combine, which announced free power sops to farmers on August 4, has started developing second thoughts about the dole and the State electricity board (MSEB) is now implementing a single phase system to restrict power supply to agricultural pumps to prevent misuse.

The State faced a severe loadshedding in urban and rural areas alike and deficit has reached about 3,000 MW due to increase in demand, lack of capacity and non-availability of power from outside on account of transmission constraints.

The situation was further worsened by arbitrary use of power in rural areas after the free power announcement.

The State, which had a capacity of about 10,825 MW, was facing a shortage of 2100 MW in morning peak hours and 2600 MW in evening peak hours. If no addition was done, the deficit could rise upto 7,765 MW by 2009-10. The MSEB had implemented a Krishi Sanjivani scheme for recovery of dues in earlier part of the year and collected arrears of Rs 632 crore. But after the announcment of free power, the collection of arrears has dropped.

Though the projected demand in the State is expected to rise by 9,000 MW by 2010, the capacity addition by the State electricity board and private players during the year has been nil.

The board would add additional capacity of 500 MW at its power project at Paras and Parli, 1,000 MW through gas-based power project at Uran, 500 MW expansion projects each at Khaparkheda, Nasik and Bhusawal and 500 MW JV project at Bhusawal. The restructuring of the State electricity board into three companies was delayed yet again this year after the State government sought a six-month extension following protest and threat of strike by employees.

The generation projects submitted by private companies including Tata Power Company (TPC), Reliance Energy Ltd (REL) and Jindal Power are stalled with the State government for the want of concessions.

The 1,000 MW Vile Project of TPC received environmental clearance during the year.

The year also saw the private players including TPC and REL bagging trading licences.

However, the standoff between TPC and REL over standby charges continued with the Maharashtra Electricity Regulatory Commission (MERC) asking TPC to refund REL Rs. 322 crores and pay Rs. 58 crores towards unpaid standby charges to MSEB. There were little signs for the start of the troubled 2184 MW Dabhol power project which saw the majority stake held by Enron pass on to the hands of GE and Bechtel, the other co-promoters.

The Union Cabinet constituted an empowered Group of Ministers to resolve the crisis related to the Dabhol power project and would look into various issues including providing a Central guarantee for financial institutions, to raise loans from the market for the restart.

PTI

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Free power worsens situation in Maharashtra