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Need to securitise SEB dues, says CII

The Confederation of Indian Industry has underscored the urgency to clean up the balance sheets of the state electricity boards and work towards securitisation of SEB dues.

One-time wavers based on the ability of SEB to break even in two years as suggested by the Union Minister of Power Suresh Prabhu needs to be taken seriously and taken forward by the states, believes CII.

According to CII, it is not just the costlier power as reported in the Enron case, which is a sole irritant in revisiting the power purchase agreement.

The recent AES-Orissa case is a contrary, where the cheapest power is inaccessible due to reluctance and inability of the investor to supply power owing to non-realisation of payment.

Besides, the Enron imbroglio and the AES-Orissa muddle, other unpleasant instances such as scrapping of PPAs of Patalganga, and Bhadrawati Project in Maharashtra, PPA review demand of ST-CMS project, underline the need for expediting power reforms.

Reneging of small distributed power generation power projects such as co-generation and wind power projects by Tamil Nadu followed by other states is also viewed with great concern.

According to CII, unless immediate steps are taken by the Centre and the states to implement the measures agreed to at the chief minister's conference convened by the prime minister on March 3, 2001, such developments could lead the country to a dark future.

The power sector progress has been tardy mainly due to inability of states to make power accessible and affordable, rationalise tariffs, generate revenue streams, follow energy accounting norms, control pilferage and realise user charges.

Perhaps, by ignoring these impediments faced by the developers, the state governments have the ominous excuse of opting for the cheapest power without bothering to honour the commitments made by them to the independent power producers.

Hence private investments and FDI inflows in power generation seem a mirage in the short term and thus the country sees no other option but to expect NTPC, NHPC and SEBs to usher in new capacity.

CII is hopeful that the number of initiatives taken up by the Union Ministry of Power in ushering the states towards power sector reforms would break the stalemate.

The shift in focus of the Union ministry of power from projecting timelines for financial closure of IPPs, liquid fuel projects, mega projects and others, which were seldom complied with, to realising the urgent need for reforms, would augur well.

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