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Goa government planning to shelve power privatisation

Sandesh Prabhudesai in Panaji

Chief Minister Dr Wilfred de Souza’s coalition government in Goa is planning to shelve the policy of power privatisation, casting a doubt on the fate of pending proposals of private power generators.

Not that the government wants to disown the Congress's policy. It has got to do with the tough stand adopted by the International Finance Corporation. The IFC is working on state’s privatised power transmission and distribution policy.

The IFC, in order to revive the power scenario in the tourist state, had suggested a centralised private power distribution firm, to which private power generators would sell its power to. It also suggested energy tax to different classes of consumers including the industries.

The Congress government had officially announced the power privatisation policy about six months ago, little realising that it directly contradicts the IFC proposal which has also been officially accepted by the government in June.

A British consultancy firm reportedly offered to withdraw from the scene if the then Congress government went ahead with its privatisation policy while also agreeing to the IFC’s proposal which has to be implemented by next year.

The government last month held back the letter of permission for Reliance Salgaoncar that would have allowed the company to generate and sell additional 100 mega-watts directly to industries. Its 50 MW project, as per the power purchase agreement signed two years ago, would be commissioned next month.

The power ministry was also sitting over two more proposals which the private firms had worked out in consultation with some industries to supply around 100 MW to help them to overcome heavy losses due to an acute power shortage in the state.

According to power secretary Rakesh Mehta, the IFC proposal clashes with the government's privatisation drive since the regulatory authority, to be appointed by next month, would have had tough time in fixing the tariff structure if the private generators had signed the PPA with the industries.

''We may now revive the old system of purchasing power from the private generators by signing the PPAs till the central private distribution firm takes over,'' says Mehta. Instead of scrapping it, he proposes to amend the privatisation policy, but by inviting competitive bids.

Meanwhile, in order to control the worsening power situation, the new government at its first cabinet meeting has decided to scrap provisional registration of 38 power-guzzling units including ferro alloy and steel rolling mills that required additional 105 MW of power.

Goa, which gets only 210 MW of power from the NTPC, was pushed into acute power crisis by allowing 93 power-guzzlers in the state in last five years, putting additional burden of 268 MW. This obviously resulted in load-shedding and frequent power-cuts.

Twenty such units are already consuming 65 MW while 35 more units have been promised supply of 98 MW. But Dr de Souza has now decided to allow the second batch of power-guzzlers, depending upon the availability of power, provided they agree to accept load-shedding.