New power policy to spark off public-private bidding

NEW DELHI: The National Electricity Policy, which is in the advanced stages of finalisation, will detail guidelines for reviving the competitive bidding system for facilitating private and public sector participation and thereby completely overhaul the power sector, according to PM Sayeed, Union Power Minister.

Inaugurating an energy summit organised jointly by Assocham and the India Energy Forum (IEF) on Wednesday, the power minister said his ministry would announce the new policy package on power, tariff, rural electricity and policy on stand-alone system of generation and distribution for rural areas, sometime towards the end of October.

He added that the proposed policy will have detailed guidelines under which exhaustive but simple procedures would be prescribed for the competitive bidding so that the power projects awarded under the bidding system are executed without any confusion and legal disputes.

“The new policy package of the Union power ministry will lead to not only expansion of the generation industry but would also be commensurate with augmentation on transmission and distribution. It will also lead to a gradual restructuring of the power market which would eventually acquire all the features of competition�, Mr Sayeed said.

The minister announced that since the enactment of the Electricity Act 2003, the interest of power project developers as also of lenders and financiers have revived as in the first nine months of the current calendar year, roughly 4000 MW of capacity in the private sector have secured financial closure.

In addition, a large number of state-owned utilities have also achieved financial closure. Orders have also been placed for construction of power plants, Mr Sayeed said, adding that project developers and lenders have recognised the features of the Electricity Act and various other policy instruments of the government.

“The Act, together with instruments like rating of electricity boards, accelerated power development and reform programme, memorandum of agreement for preparation of business plan and turnaround of state utilities, have all generated new levels of confidence among the stakeholders�, observed Mr Sayeed.

Speaking on the occasion, power secretary R V Shahi said that electrical energy in India was still expansive because of its distribution lacunae and theft factor which is quite rampant among the industrial units. “If this theft is reduced by 50%, the cost of power would come down in that proportion�, he observed.

Mr Shahi said that the focus of his ministry in the 11th, 12th and 13th five-year plans would be towards harnessing hydro potential of the country as it is one of the renewable sources of energy and available in the country in abundance.