The Hindu : Opinion / News Analysis : Dabhol ghost haunts Maharashtra

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Saturday, Apr 30, 2005

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Opinion - News Analysis

Dabhol ghost haunts Maharashtra

Kalpana Sharma

The clearance for the Enron-led conglomerate to set up the Dabhol power project under conditions skewed in favour of the multinational has landed Maharashtra literally in the dark.

AS THE blistering heat of summer sets in, Maharashtra is confronted with its worst power crisis. In a State that was once self-sufficient in power, its power deficit in one day in April hit 4,000 MW. For the next two months, the State's rural parts will have to suffer nine hours without power while urban areas, excluding Mumbai, will have to tolerate four hours of load-shedding.

Why has India's most industrialised State fallen to such pathetic depths? Officials of the Maharashtra State Electricity Board (MSEB) suggest that apart from other reasons, one major landmark in the road leading to the current crisis is the Dabhol fiasco. That single, ill-advised decision, to clear the Enron-led conglomerate to set up a two-phase 2,045 MW power project in the Konkan region under conditions that were hugely skewed in favour of the multinational has landed the State literally in the dark.

Controversial project

In 1996, when the controversial Dabhol Power Company (DPC) project was finally cleared, Maharashtra had a comfortable power position. Today, the ghost of DPC continues to haunt the Maharashtra Government and the MSEB. Officials admit that the MSEB's planning department was virtually wound up with the advent of power from DPC. As a result, in the last 10 years, no new projects have come on board. Meantime, DPC shut down in 2001 over the standoff with the MSEB over tariffs, the demand for power has continued to grow and supply has remained static.

Not only has the demand grown, but also the MSEB has finally acknowledged that it loses an incredible 35 per cent of the 9,711 MW it generates in transmission and distribution (T & D). That means 3,398 MW, just a little less than the current shortfall, is lost or stolen. The grim reality now facing the State's electricity board is the absence of alternative power in the immediate future, huge losses of even what exists, and increasingly angry and frustrated consumers.

The last two months have seen a flurry of activity on the part of the State's Energy Ministry headed by Dilip Walse Patil and the MSEB. Earlier this month, the Maharashtra Government signed MoUs with eight private power companies inviting them to set up plants that would generate an additional 12,500 MW of power in the next five years. They are required to sell 50 per cent of their power within Maharashtra.

The Government is also counting on a resolution of the DPC problem. The case is currently being heard in the Supreme Court where DPC has challenged the Bombay High Court ruling on the legality of the Maharashtra Electricity Regulatory Commission (MERC) revoking the agreement between the MSEB and DPC. But even if an agreement were arrived at today, it would take at least 18 months before the plant at Dabhol, closed since June 2001, can start generating power again.

That leaves the MSEB with no other option but to reduce T&D losses and increase efficiency in collecting charges. For that, the Board has to be restructured as required by the Central Electricity Act, 2003. The Minister told the press that by June, the process of breaking up the MSEB into a holding company, a transmission company, a generating company and a distribution company will begin — that is if the MSEB unions cooperate. At the moment, an indefinite strike is threatened.

Single phasing of power

Another saving device that is being implemented, at a cost of Rs. 500 crores, is switching over to single phasing of power supply to rural consumers. The MSEB chairman, Jayant Kawale, says this will not only save power but will also obviate the need for the kind of drastic power cuts being carried out currently. All villages will get electricity for 24 hours while pumps, that need three-phase power, can be used for 8-10 hours only during non-peak hours. This will give a relief of 2,100 MW, he says.

The MSEB will also be the first electricity board in the country to outsource power distribution and collection of charges. According to Mr. Kawale, tenders have already been sought for Bhiwandi, the powerloom township on the outskirts of Mumbai that has one of the highest demands for power. The MSEB expects that by August it will franchise power distribution to a private company on a commission basis. It expects that this could cut down T & D losses that are a high 46 per cent in Bhiwandi, and improve the current 57 per cent collection efficiency.

None of these short-term measures can negate the urgent need for intelligent long-term planning for power, something that has been sorely missing in Maharashtra. This must take into account ways to reduce consumption, increase environmentally benign and cost-effective modes of power generation, and financially sound planning. If such thinking had been in place in the early 1990s, then perhaps the Dabhol problem would never have occurred. And its shadow would not have continued to hang over a power-starved State.

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