The Hindu : Business : `No review of power tariff policy for now'

Online edition of India's National Newspaper
Friday, Feb 17, 2006

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Business

`No review of power tariff policy for now'

Special Correspondent

Private players should execute the projects on their own

NEW DELHI: The Union Ministry of Power on Thursday ruled out the need for reviewing the National Tariff Policy for now while dismissing all objections raised by private players and regulators. Instead, it asked them to remove their "mindblocks" and execute projects without government guarantees.

"There is no question of reviewing the policy now...It's too early, we have just released it," the Power Secretary, R. V. Shahi told newspersons on the sidelines of a seminar on tariff policy organised by the Confederation of Indian Industry (CII).

Pointing to the in-built discrimination in the tariff policy announced last month, private power players have noted that while they were required to follow the process of competitive bidding with immediate effect, state-owned companies of the likes of NTPC were exempted from this stipulation for a five-year period. This, they said, provided an undue advantage to the public sector companies.

Taking up cudgels on behalf of the private sector, the CII, in a terse statement, charged that the Ministry had failed to "differentiate between its role as owner of state-run companies and its role as a policy making body for the entire industry". "The prescription of mandatory competitive bidding for new capacity procurement for all, except state-owned companies, for the next five years is a clear manifestation of this," it said.

Refuting the charge as a very "irresponsible" statement, Mr. Shahi said it showed a "lack of understanding" and the perception would have to be changed. He pointed out that even as the private players demanded a level playing field in the power sector, they did not do much by way of fresh capacity creation. In fact, for this, the Government had to depend on public sector companies, he said.

"Mindblocks have to be removed. Private companies should execute projects on their own balance sheets...There will be no guarantees. We know what happened to Dabhol," Mr. Shahi said.

The NTPC Chairman and Managing Director, C. P. Jain, said that the Central utility was prepared to implement power projects on the basis of competitive bidding.

Besides, he said, the public sector power major was keeping its options open on participating in the Power Ministry's new initiative of five ultra mega projects of 4,000 MW each which also were to be decided on the basis of competitive bidding.

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