Maharashtra Wary Of Giving Surety To Power Projects

The Maharashtra government may not extend guarantee to any future power project in the state. State energy secretary Asoke Basak said in Mumbai yesterday that although the government had not taken a final decision on the issue, it was contemplating not extending guarantees to any future project in the state.

Speaking at a two-day seminar on risks in power projects in India organised by the Independent Power Producers Association of India and Power Consultancy Organisation SGS India yesterday, the energy secretary also bemoaned the lack of progress in power projects in Maharashtra.

Although the power purchase agreement had been signed with the Reliance group for setting up a power project at Patalganga nearly a year ago, things have not progressed as RIL is yet to obtain techno-economic clearance from the Central Electricity Authority (CEA).Basak pointed out the state had not extended any guarantee for the tenders floated by it for setting up seven small power projects recently. The regime of guarantees and counter-guarantees is over.

 

The state finance department had objected to extending guarantees as it entails a considerable financial obligation. Basak pointed out the counter-guarantee to the first phase of the Dabhol power project entails a liability of Rs 1,500 crore. The Ispat groups Bhadravati project has also been stuck for similar reasons. The Centre has yet to clear the fuel linkage although an in-principle approval has been given.

Basak mooted the formation of a state-level tariff commission for which a national consensus exists. This will insulate the state electricity boards from government interference and enable them to take commercially correct decisions.

Arthur Andersen Economic & Financial Consultants managing partner Ashok Wadhwa advocated the restructuring of SEBs and privatisation of transmission & distribution. He urged appointment of collection agents for power tariff to ensure greater accountability.