New Delhi, Jan 18 (IANS) Prime Minister Manmohan Singh Wednesday assured independent power producers that their problems would be taken care of in a time-bound manner and directed various ministries to formulate an action plan on the issue. A group of ministers also will meet soon to address the situation, officials said.
The prime minister moved on the power sector woes when a delegation of independent power producers, who account for nearly 95 percent of the country’s private sector power generation, met him and sought his intervention for resolving issues confronting them.
According to the Prime Minister’s Office (PMO): “After giving a patient hearing to their demands, the Prime Minister assured the private players in the power sector that a practical, pragmatic and viable solution will be found to the plethora of problems facing the power generation and distribution sector.”
“The Prime Minister assured the delegation that action will start immediately and his principal secretary will meet the representatives after one month to apprise them of the progress made.”
The prime minister in his meeting underlined that the power sector is involved in the process of nation building and there is a need to reduce risks to make the power projects viable.
“He said it’s a national challenge and asked the industry representatives not to lose heart. He assured the delegation of his government’s commitment in taking all possible steps to mitigate the problems being faced by the power sector”.
The meeting was also attended by Power Minister Sushil kumar Shinde, Coal Minister Sriprakash Jaiswal, Deputy Chairman of the Planning Commission Montek Singh Ahluwalia and Minister of State (independent charge) for Environment and Forests Jayanthi Natarajan.
The Association of Power Producers (APP), which consists of 21 power producers who account for over 95 percent of power capacity in the private sector, said a co-ordination committee under Pulok Chatterjee, principal secretary to the prime minister, would be formed to address the problems. The committee will meet every week.
A group of ministers (GoM) would also meet on the issue soon, it said.
The association also raised the demand for import duty reduction on foreign power equipment and allocation of more gas from non-core to core sectors.
The issues confronting the companies include fuel shortages, pricing related to imported coal for power projects, delay in environment and forest clearances, funding problems and worsening health of power distribution companies (discoms).
In a day-long exercise to apprise the government of the problems they are faced with, chiefs of private power companies also met Coal Minister Sriprakash Jaiswal and Planning Commission Member B.K.Chaturvedi.
They included Reliance Group chairman Anil Ambani, Tata Sons’ vice chairman Cyrus Mistry, Jindal Steel and Power’s Naveen Jindal, Essar Group’s Prashant Ruia, GMR’s G.M. Rao, Gautam Adani of the Adani Group and Lanco Infratech chairman Madhusudan Rao.
“They (power producers) have a lot of issues, gas and coal related, power ministry. So, regarding these problems, Prime Minister Manmohan Singh is meeting the company heads of these private power companies,” Coal Minister Sriprakash Jaiswal told reporters earlier.
Rejecting private players’ proposal for pooling in of domestic and international coal prices that will be shared by all firms, Jaiswal said: “For thermal power production, coal is required. They (power companies) had suggested that the pooling of prices should be done and the burden would be shared by all the power producers, which is not possible.”
According to Jaiswal, the coal ministry would look at enhancing the minimum quantity that coal companies have to supply to plants. Under the current fuel supply agreement, the minimum threshold that coal companies have to adhere to is 50 percent of the total agreed quantity.
“One of their (power companies) problems was the signing of the FSA (fuel supply agreement). They had asked to increase it from 50 percent. We will talk to the power ministry and if they agree we may take it to 65-70 percent.”
If coal suppliers do not adhere to this minimum threshold, they can be penalised.
Earlier in a proposal, the power ministry had pushed for a guaranteed 90 percent of fuel supply for all thermal power projects which were commissioned or were to be commissioned between April, 2009, and March, 2012.
Fuel shortage due to stagnant domestic coal output, lower gas output and environmental clearances have held up some of India’s biggest power projects. India has a 12 percent power deficit in the peak hours.
Environment Minister Jayanthi Natarajan said the companies will have to adhere to the current policy.
“Within my mandate to protect the environment, our policy will be to have consistent, transparent guidelines,” Natarajan told reporters.