 "Consumer body seeks privatisation in transmission sector")
Seeking privatisation of power transmission sector in order to boost efficiencies, Ahmedabad-based Consumer Education Research Society (CERS) has written a letter to Piyush Goyal, Minister of State with Independent Charge for Power, Coal and New & Renewable Energy in the Government of India against the Power Grid Corporation of India Limited (PGCIL)'s monopoly in the sector.
An active NGO in the power sector, CERS has alleged that while power generation capacity has increased in the country, PGCIL has failed to its pace in terms of transmission network, thereby creating inefficiencies in the sector. In its letter, CERS has called for a break in PGCIL's monopoly in transmission by allowing privatisation of the sector.
Speaking about the letter, KK Bajaj, chief general manager at CERS said, "Power generation capacity has increased in India but PGCIL has failed to match pace with power generation capacity addition. It has failed to create transmission network in line with commissioning of power projects."
Senior PGCIL officials, however, dismissed such charges and said transmission by its physical nature is a monopolistic business just like roads. "Anyone who sets up power transmission business at a large scale is creating a monopoly and that is the reason this sector is regulated and not given away to the private companies," said a senior executive at PGCIL.
The CERS letter mentions that power generation capacity in India has increased by 22,566 Mw in 2014-15 but due to bottleneck in transmission sector, electricity consumers of India are deprived of this benefit. The government now plans to invite bids for four major projects worth Rs 4,000 crore.
"It is most unfortunate that generation capacity has doubled in comparison to power transmission capacity which has increased by 1.5 times. Private sector has played an important role in increasing the generation capacity while transmission sector has been deprived of private participation," the letter read.
"Due to bottleneck in transmission sector, electricity consumers are deprived of this benefit. In spite of having surplus generation capacity, Government owned power plants are shutdown or are operating at low Plant Load Factor (PLF)," said Bajaj.
Private sector contributes 38 per cent to generation capacity of 2,72,000 Mw against 3 per cent of transmission sector. Private sector participation and competitive bidding promotes and results in lowering tariff for consumers. Of the five major projects won by the private sector which were scheduled to be commissioned between 2012 and 2015; only three have been commissioned.
"PGCIL is not only keeping private developers at bay but also denying market access to private producers. In 2014-15 nearly 3 billion units of electricity remained unsold due to lack of transmission facilities to Northern/Southern India," the body stated in its letter.
"Earlier it was alleged that the PGCIL's cost of setting up transmission is too high and it should be privatised to bring down the cost. Now, when we are bidding low, private companies are asking for a level playing field. The intent rather should be to bring down the cost," said the PGCIL official. He said the day PGCIL pulls out of the sector, the costs would go up by 60 per cent.
The letter goes on to suggest that despite anomalies, the government has allocated major projects to PGCIL. "It means loss of opportunity for the economy to attract private and foreign investments besides encouraging inefficient public sector unit at the cost of consumer interests," said the letter.