'World Bank has no role in power pricing'

By Sridhar Krishnaswami

WASHINGTON, APRIL 27. The World Bank has no intention of getting involved in power pricing in the Indian sub-continent and that this is best left to the ``markets'', says its president, Mr. James Wolfensohn.

In the context of the Dabhol Power Project in Maharashtra, the World Bank chief was asked at a press conference whether the Bank could offer member States standard ideas and standard forms that countries could sign without having to feel ``cheated'' on the pricing front at a later date.

Arguing that throughout the subcontinent the issue of power pricing has been a major one, Mr. Wolfensohn maintained that the Bank had been helpful with a lot of countries in terms of rationalising power pricing. ``But it is not just pricing...it's also line losses which have been tremendous in many of the countries. And I don't think we have a magic formula for the original contracting,'' Mr.Wolfensohn argued.

The World Bank president went on to make the point that given the prominence that has occurred in recent years on both the negotiation of contracts and the establishment of pricing there was much more transparency and a vigourous public bidding system than has been seen five or ten years ago.

``So I think it's correcting itself. I don't think it is for us (meaning the World Bank) to dominate the markets. I think as we go forward we are having a renegotiation of many of the cost contracts. And what I am seeing is in the future contracts that if there are problems, they get public very quickly and no doubt that is what's happening in Maharashtra,'' Mr.Wolfensohn noted.

``So I would leave it to the market. I think the Governments of India and of your neighbours are now very, very conscious of these problems and are dealing with them,'' the World Bank president added. Mr.Wolfensohn spoke to mediapersons on the Agenda of the Spring Meetings of the World Bank and the International Monetary Fund.

For his part the Managing Director of the International Monetary Fund, Mr.Horst Kohler, said that he was ``happy'' that the growth rate of China and India was ``strong and stable'' and made the point that the issue of higher economic growth in India was pegged to the further implementation of the structural reforms.

Mr. Kohler noted that it was entirely possible for India to have a growth rate of 8 per cent or higher and that a higher growth rate was needed to continue the campaign against poverty reduction. The bottomline for India, according to Mr. Kohler, was a commitment to reforms and implementation. The head of the IMF was speaking to the media on his institution's goals and objectives for the Spring Meetings which formally gets under way on Sunday here.

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