Power Minister Sushil Kumar Shinde has stressed on the need for creating confidence among foreign investors to attract foreign direct investment in the power sector.
"Despite making provisions for 100 per cent FDI in the power sector under the Electricity Act, 2003, there was not much response. But now we have taken many corrective steps to help the power sector grow, which is restoring confidence among foreign investors," Shinde said at the signing of a joint venture agreement between Sembcorp Utilities of Singapore and Hyderabad-based Gayatri Energy Ventures Private Limited in Hyderabad on Tuesday.
"Sembcorp is the first foreign company to invest in the power sector in India in the last four-and-a-half years," the Union minister said referring to the joint venture, which is setting up a 2,640-MW super-critical thermal power plant at Krishnapatnam in Andhra Pradesh.
While Gayatri will have the majority 51 per cent stake in the JV, Sembcorp will hold the balance. Shinde recalled that immediately upon assuming power in 2004, the United Progressive Alliance government had pumped in Rs 10,000 crore (Rs 100 billion) to revive the Dabhol power project (now known as Ratnagiri Gas and Power Private Ltd).
"Prime Minister Manmohan Singh is very particular that the country's image should not suffer and hence, we pumped Rs 10,000 crore to get the power plant running at Ratnagiri," he pointed out.
Stating that the government had done a lot of 'introspection' into what was ailing the power sector, the Shinde said many corrective steps were taken to put things back on track.
Though it was envisaged that 42,000 MW of power capacity addition would take place during the Tenth Plan, only half of the target could be achieved because of many shortcomings.
"Primarily, there was no monitoring of the projects and orders for equipment were not placed in time.
"Besides, BHEL did not have adequate capacity to meet the needs, leading to inordinate delays in execution of projects," Shinde said.
Now, BHEL has gone in for a massive capacity expansion, while three monitoring committees were set up at different levels to ensure that power projects were executed in time, the minister added.
With the expansion projects in full swing, Shinde said every household in the country would get electricity by the year 2012.
The per capita power consumption in the country would also simultaneously go up to 1,000 WH from the present 700 WH, he added.