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REGULATION | Cesar Tordesillas, India
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Pressure mounts for Indian PM to solve power woes

Indian PM Manmohan Singh will come under intense pressure to respond to the country's power crisis when he meets power executives.

 

Tata group Chairman Ratan Tata, his deputy Cyrus Mistry, Reliance Power Chairman Anil Ambani, Adani Power Chairman Gautam Adani and top executives from other private power firms will be part of the delegation, organised by the Association of Power Producers.

The executives will also meet ministers in charge of finance, coal, petroleum and environment on the same day.

"Power companies have been pushed into a corner and therefore they felt they should take the issue to the highest level in the government," said V. Srinivasan, analyst with Angel Broking.

Power sector executives are likely to push for swifter action to improve access to coal and make it easier to get funding, acquire land and get environmental clearances.

Policy gridlock in India, which has resulted in little economic reforms in the past few years, has crimped investment and contributed to a slowing of the economy.

A shortage of coal and gas and uncertainty over supply have thrown the business plans of the generators into disarray and made lenders reluctant to lend, delaying projects.

Tata Power and Reliance Power, developers of 4-gigawatt plus power plants, are lobbying the government to free them from loss-making power sales contracts and want to be allowed to pass on rising fuel costs to consumers.

However, power producers have agreements with state governments over tariffs and the federal government can do little in the regard, Angel Broking's Srinivasan said.

Plants that can produce about 20,000 megawatts thermal power are working at sub-optimal capacity, and another 30,000 MW of plants under construction are likely to be affected by fuel shortages, said Ashok Khurana, director general at the Association of Power Producers.

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