 |
 |
 | |
| Home | Voice of Electricity workers | Press Release | Resolutions | Feedback | About Us | |||
|
Voice of Electricity Workers The power sector may finally see some light. After several years of beating around the bush on power sector reforms, the government is now planning to switch on some major policy changes. To that extent this year’s budget could be quite power packed. Even though the power sector was among the first to be opened up for private investment, there is precious little that has flowed into the sector. And even projects that did take off, like Enron’s Dabhol power project, is facing major problems due to the state electricity board’s inability to meet its payment obligations. It is learnt that the main focus of the budget for the power sector will be on improving the financing facilities for the private power projects which in turn will be linked to the reforms of the state electricity boards (SEBs). According to the recommendations of the power ministry, the corpus of Power Trading Corporation is being increased to about Rs 4,000-5,000 crore. Sources in the Power ministry said that the financial position of Power Trading Corporation is being strengthened keeping in view the role it will be required to play. Power Trading Corporation is expected to play the role of both the official government trading body for mega power projects and also provide guarantees for payment securities. Power Trading Corporation officials had initially made a case since their equity base was very low it would be difficult for the company to sustain these roles if any of the consumers failed in their payment obligations. This again is expected to help financial institutions provide finances for private power projects. It has also been decided that the power ministry will take up an accelerated programme for electrifying the rural belt. Sources in the power ministry said that a special plan had also been drawn up for an accelerated programme in renovation and modernization and hydel development. Although the government has been making efforts to improve private investments in this sector it has failed to do so and the government is expected to come out with a special package for the hydel sector. In yet another incentive to power developers the government is also considering a proposal to withdraw the ceiling of 16 per cent on the rate of return on equality for power projects and instead introduce as tariff –based system.
Under the new system, the companies have to
initially compete on the basis of tariff and assuming that all the bidders are
technically qualified, the project will be awarded to the lowest tariff bidder |
| Copyright © 2002 - 2004 Electricity Employees Federation of India. All Rights Reserved. |
 |
