Pvt Firms To Gain From Move To Curtail Cea'S Powers

Under the new norms planned by the government, CEA will not only lose its tariff regulatory authority over central power utilities but will be stripped of its power to scrutinise power projects up to 1,000 mw.

The state governments will be given permission to set up power projects of up to 1,000 mw under the new rules. This, CEA officials say, will divide the power project development potential as the states will work on narrow regional terms, unlike the broad view taken by the authority.

They said large project sites will remain under-exploited while states with less natural resources will suffer.

 

A formal decision on the future of the country's apex power regulatory body is likely to be taken after Prime Minister H D Deve Gowda meets state chief ministers and power ministers in the capital on October 16.

Senior CEA officials told Business Standard on conditions of anonymity that they were not taken into confidence while formulating the guidelines. The United Front government, sources said, was succumbing to the pressure from the state governments.

Prime Minister Deve Gowda has hinted at raising the limit of power project cost from Rs 1,000 crore to Rs 4,000 crore. This view has been supported by the Chief Ministers of Andhra Pradesh and Tamil Nadu.

In the changed political scenario, this move is being viewed by the states as a gradual transfer of regulatory power from the CEA to the states. CEA officials argue power should be viewed more as a national subject rather than a state issue.

Sources said CEA will be left with hardly any project to scrutinise and clear once the Centre raises the upper limit of project cost for states. With an average power project cost of Rs 4 crore for each megawatt of installed capacity, all projects up to 1,000 mw size will go out of the CEA control.

Development of power is a game of harnessing the natural and financial resources of the country. It cannot be a state or regional issue. It should always be viewed from a national angle, said a top CEA official.

With the emergence of central power utilities like National Thermal Power Corporation and National Hydroelectrtic Power Corporation and Power Grid Corporation, CEA sources said These were aimed at best exploitation of natural resources and offering the benefit on a regional basis.