Power sector's demands need a sympathetic look: Shinde

A few hours ahead of a crucial meeting of power sector leaders with the Prime Minister, the union power minister, Sushil Kumar Shinde said that they have to take sympathetic look at the demands of the sector.

“As a government, we have to look at the demands carefully and sympathetically,” Shinde said on the sidelines of Elecrama, an industry event in Mumbai.

He was referring to the request made by imported coal based power producers who are facing cost escalations after the Indonesian governemnt levied duties on exported coal.

That move has put large projects like Tata Power’s 4,000 megawatts Mundra ultra mega power project as well as that in Krishnapatnam, which belongs to Reliance Power.

Promoters of top private sector companies like Ratan Tata, Anil Ambani, G M Rao, G V K Reddy, Madhusudhan Rao and others would be meeting with the Prime Minister at 5 PM today, along with Shinde.

The meeting is also likely to discuss issues like coal shortages for existing capacity and lack of fuel supply agreements for upcoming capacity, in the Twelfth five year plan capacity addition.

Shinde said that fuel shortages have come in because of huge power capacity addition which was done like never before in the country.

“When one sector (power) runs so fast, others like coal and gas have lagged behind. We are quite confident that in a year or so the position will improve,” he said.

The union power minister also hopes that duties would be levied on imported power equipment for the capacity which will be added as a part of the Twelfth plan. The ministry had referred this matter to the finance ministry.

“We have to protect them (local manufacturers) because it is on our assurance that they have set-up capacities here,” said Shinde.

In addition, Shinde also said that they have given a direction to the states to automatically increase tariffs on an annual basis, and hoped that this procedure would be followed from next year.

“Some states have not increased tariffs for the six to seven years and some have started doing it now,” he said.

According to him, annual automatic hikes would help the consumers and protect them from sudden burden of hikes of many years.