Power sector likely to miss 11th Plan targets due to rising input costs

The government may miss its power capacity addition target for the current Five-Year Plan due to rising cost of cement, steel and other material used for building power plants, said industry chamber Assocham.

“The Planning Commission has estimated the fund requirement of Rs. 4,10,897 crore for the likely capacity addition of 68,869 Mw during the 11th plan. However, considering the recent trends in inflation, this amount is now seen as substantially low. Therefore, there should be an upward revision for the funds to be invested in the power sector to ensure that 11th Five Year plan targets are met,” said Sajjan Jindal, president, Assocham.

Raw material required for setting up power plant and distribution network include cement, steel, aluminium, copper and zinc. The weighted cost of these key input materials for the power sector in the 11th plan has seen an increase of 25 per cent over the last two years, Assocham said in a statement.