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Private participation in power sector must: Geete

Union Power Minister Anant Geete on Saturday said the Maharashtra Government was negotiating to bring down the tariff of the ailing Dabhol Power Company to acceptable levels.

Earlier, the Maharashtra electricity board had offered to buy electricity at Rs 2.25 per unit, which was lower than the cost of the fuel, naphtha, at Rs 2.30 per unit.

Addressing a seminar on Dabhol in Mumbai, Geete said he has requested the Oil and Natural Gas ministry and the Maharashtra Government to waive excise and sales tax on naphtha. Even after exempting sales and excise duties, the cost of naphtha would come down to around Rs 2.23 per unit.

Geete said that first the plant needs to be restarted and then other related probelms can be sorted out. He said the Centre will not provide guarantee or counter-guarantee to new power projects, which must operate on a commercial basis.

Regarding BSES' power plant in Kochi, the minister said he held a meeting with the company officials and the Kerala Government on Friday and efforts were on to restart the plant.

He said high tariff was the main reason for the plant's closure and added that the state government needs to buy electricity and repay the dues within a week.

Geete said participation of the private sector was a must to ensure a massive investment of Rs 8,00,000 crore (Rs 8000 billion) for the generation of 100,000 MW of electricity by the year 2012.

''The Centre, state governments and the private sector need to shoulder this responsibility of generating electricity. Every state was facing power deficit at present,'' he said.

Explaining the challenges before the power sector, Geete said the rate of interest charged by financial institutions was very high and most of the state electricity boards were in a debt trap.

He said SEBs have cumulative losses of Rs 30,000 crore (Rs 300 billion) due to 40 to 50 per cent transmission losses. ''The government will try to pass the Electricity Bill, 2001 in the next session of Parliament,'' he said.

The seminar was organised jointly by Independent Power Producers Association of India and All-India Association of Industries.

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