Voice of Electricity Workers April-June 2002 Index
POWER MINISTRY SEEKS DUTY WAIVER ON GENERATION EQUIPMENT
The
power ministry has written to the ministry of finance SEEKING WAIVER OF Custom
duty on import of capital equipment for all power generation
projects-irrespective of their source of funding -for a period of three years.
The ministry has also sought a similar excemption for power transmission project
imports.
At present, exemption from custom duty on import of capital
equipment is available for generation projects, funded by multilaterals such as
World Bank and Asian Development Bank(AADB), and also for mega power projects.
However, generation projects funded through domestic resources have to pay
customduty even if they are set up on the basis of international competitive
bidding.
Also, power transmission projects are required to pay a higher
effective customs duty of 50.8 per cent where as generation project carry an
effective duty of only 21.8 percent for import of equipment.
The power
ministry has been seeking finance ministry intervention with regard to
rationalization of duty for power projects, but there had been no response from
the latter so far.
Transmission projects are an extension of generation
projects and unless transmission is strengthened, evacuation of power from new
projects would continue to be a problem.
Major work on improving the
transmission system is on the cards, with the proposed linking of the five
regional grids into a national grid.
The ministry of power is working out
the funding plan for executing the project and government has set ambitious
targets for participation in the project by the private sector.
The
relaxation of duty norms is expected to lower costs for private players
undertaking transmission projects through the independent Power Transmission
Company (ITPC) route and also lower for state-owned Powergrid Corporation Ltd
(PGCIL).
Private participation through joint venture has now been ruled out
in the light of luke warm response from private players, and further
augmentation of the transmission capabilities is expected to be carried out by
private players and through the IPTC route and by PGCIL.
Courtesy: Business
Standard: 6.5.2002
|
