Only 7 BJP-ruled states give thumbs up to Railways open access of power

Punjab likely to become the first non-BJP state to give no-objection certificates

The Indian Railways' scheme of procuring electricity directly from the generator of its choice has so far got clearance from only seven BJP-ruled states, while the Congress-led Punjab may become the first non-BJP state to join the bandwagon.

The national transporter expects savings of Rs 3,000 crore per annum through open access to electricity. “About 40 per cent of our power requirement is currently met through open access. We are currently procuring 750 Megawatts (Mw) of power and this is expected to cross 1,000 Mw by the end of this financial year. Punjab and Odisha, too, are ready to give no-objection certificates,” said an official source close to the development.

The states that have given clearances so far include Maharashtra, Gujarat, Madhya Pradesh, Jharkhand, Rajasthan, Haryana and Bihar (was a non-BJP state when NOC was given). Interestingly, Chhattisgarh and Andhra Pradesh have reduced tariffs to the tune of Rs 4.32 a unit and Rs 4.74 respectively, though they have not yet joined open access. 

Railways consume around 2.8 billion litres of diesel a year, costing Rs 18,000 crore, and 17.5 billion units of electricity. Currently, nearly 30 per cent of the fuel bill goes into paying state taxes.

In the year 2016-17, railways saved at least Rs 2,000 crore through open access. While in 2015-16, its electricity bill stood at Rs 11,000 crore, it dropped to Rs 9,000 crore in 2016-17. Even the average per unit cost dropped from Rs 6.75 per unit in 2015-16 to nearly Rs 6 per unit in 2016-17. “We are in talks with other states as well and we expect savings of at least Rs 3,000 crore in 2017-18,” the official added.

The Central Electricity Regulatory Commission had allowed Railways to undertake transmission and distribution of electricity as a deemed licensee under the Electricity Act through an order in November 2015. Through open access to electricity and crude oil imports, it plans to save Rs 35,000 crore on fuel bill in the next 10 years.

Through tie ups with Ratnagiri gas and power (RGPPL) Tata Power and Adani Power, Railways was successful in getting power at an average rate of Rs. 4.61 per unit against the average previous rate of Rs 7.07 per unit. In order to cut its fuel bill, Railways is also planning to import crude oil directly and refine it at Indian Oil Corporation’s (IOC) Vadodara unit.