Power but no punch

Pandit said this problem was sought tobe addressed by “rationalisation of tariffs”. Since power was in the concurrent list, this rationalisation should be brought about both by the Centre and states, with the latter being accorded a modicum of “independence”. It is in this context that the Central Electricity Regulatory Commission (CERC) and the State Electricity Regulation Commission (SERC) were established, and these, said Pandit, were vested with an “independent character” — a vital factor for achieving such rationalisation. Since, installing additional capacity meant capital investment, which the Centre could not meet fully, privatisation was the only answer. And the SEBs would have enough autonomy to chalk out any model appropriate to their needs.

Expectedly, Pandit failed to spell out what he meant by “rationalisation of tariffs” with private sector participation. The academic character of his presentation became evident when at the end of the technical session, a questioner pointed out that the “rationalised” tariff under thenew privatisation and reform structure in Maharashtra yielded a stiff tariff of Rs 4-plus per unit of Enron’s electricity consumed — that certainly did not consider the “rationalisation” of the consumer’s expectations.

Pandit responded by stating that after ensuring profits for the producer, transmitter and distributor of electricity (assuming that all the three were distinct entities), fixing the tariff would have to be done “carefully” to ensure the consumers’ interest. He did not say how this could be done. He also did not categorically assert that the time had come when subsidies would have to be done away with. Neither did he explain how the new reform-oriented power economics would counter the political compulsions of subsidies.

According to Pandit, incentives to invest in the power sector would help lower power tariffs. Thus, measures such as a 10-year tax holiday, exempting supplies to mega-projects (1,000 MW or more) from sales tax and local levies and the economies of scale are expected to“bring down power tariffs substantially”, notwithstanding the fact that the Enron experience had belied such expectations. But Pandit says the project came during the “transition stage” and such anomalies would be ironed out as the reform process progresses.

There was a charming irony in the fact that Pandit, speaking in the shadows of BARC and the NPCIL, paid little more than lip sympathy to nuclear power generation, stressing instead on the need to augument hydel projects by providing budgetary support to increase installed capacity.

The irony became even more evident as Dr R Chidambaram, chairperson of the Atomic Energy Commission reverted to his pet theme of achieving 20,000 MW of nuclear power by 2020 in his address inaugurating the conference. This was against the installed capacity of 2,225 MW achieved in 25 years and even accounting for the reactors going critical as per schedule, it is not likely to exceed 3,800 MW at the end of 2005.

Though chairperson and managing director of NPCIL isoptimistic about meeting the challenge of this daunting vision envisaged by Chidambaram, observers wonder how within the span of 15 years an additional capacity of 16,000 MW can be installed even with private sector participation projected as the universal panacea for all economic diseases.

The challenge is scheduled to be addressed in detail on Thursday, when distinguished nuclear engineers and scientists of the BARC and NPCIL will unveill their strategy to make Chidambram’s nuclear vision a reality.