The Hindu : `Nod after reviewing power needs'

Online edition of India's National Newspaper
Monday, Apr 22, 2002

Southern States

Southern States - Kerala

`Nod after reviewing power needs'

By Our Staff Reporter

GURUVAYUR APRIL 21. Contrary to the proclaimed policy of the UDF Government, the Electricity Department is not in favour of encouraging private entry into the power generation and transmission sectors.

This was stated here today by the Power Minister, Kadavoor Sivadasan, while inaugurating a seminar on `Power sector reforms and regulatory regime' organised by the KSEB Engineers' Association.

Later replying to questions from presspersons, the Minister said the Government might reconsider the proposals of aspirants from the private sector who have already applied for starting power units in the State. They will be given sanction only after reviewing the power requirements of the State.

This review will be applicable to the company being floated by K.P.P. Nambiar as well, he said. Anyway, the Government has made it clear that it will not give sanction for any power units based on naphtha, as the power generated from such power stations is very costly.

"Sanction will now be accorded only to power units based on LNG. But LNG will reach here only after two years. This is an indirect way of saying that we are not planning to give sanctions for power stations in the private sector. Many of the applicants will back out when we say that we will not give sanction for naphtha-based power units," the Minister said.

According to the Minister, the power demand in the State was unlikely to be double the present level within the next four years, as had been projected by the Central Government, because of the sluggish scenario in the industrial sector. So the question of setting up more power stations in the private sector would have to be reviewed again. However, efforts will be made to set up more hydel power to enhance the share of hydel energy in the State's power mix.

Asked from where would the finance come from for setting up the hydel stations, the Minister said money would not be a problem for development of the power sector in the State as many banks would be willing to provide funds.

He said steps were being taken to clear the objections raised against the Athirappally and Pooyamkutty hydroelectric projects on environmental grounds.

The Minister said the claims of the State being self-sufficient in power would become hollow if the supply from the NTPC and Central grid was stopped. The agreement with the NTPC has broken the financial backbone of the KSEB as the Board has to pay Rs. 21 crores to the NTPC even if the Board takes only one unit of power from the NTPC.

"We have appealed to the Centre to review this power purchase agreement as it was an `unconscionable agreement'. The State is not drawing the full power from the NTPC units because of its high cost. But three days ago, we entered into an agreement with Tamil Nadu under which they have agreed to take 100 MW from the NTPC station from Kerala, at the same cost at which we are taking power from the NTPC for two months. This will lead to a saving of Rs. 6 crores for the State a month. Therefore, now both the units of the NTPC stations are being operated,'' he disclosed.

The agreement with the private sector BSES, also has some unilateral conditions which force the KSEB to mandatorily pay certain amount even if only limited quantity of power is drawn from them. The Minister said the KSEB had taken huge loans from banks and other institutions during the previous LDF Government.

At one stage, the Government had to use a portion of the loan just to pay interest alone. Now, the total debt of the Board is about Rs. 6,000 crores.

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