(a) whether NTPC has proposed to implement power projects in those States where
private sector has abandoned their projects;
(b) if so, the details thereof, State-wise;
(c) whether it is difficult to operate power plants for private sector in some States due
to huge arrears outstanding against the State Governments;
(d) if so, the reaction of the Government thereto; and
(e) the steps taken by the Government in this regard?
THE MINISTER OF STATE IN THE MINISTRY OF POWER ( SHRIMATI JAYAWANTI MEHTA )
(a) & (b) : National Thermal Power Corporation (NTPC) implement their own
projects located in various States. NTPC have not proposed to implement power projects
abandoned by private sector.
(c) to (e) : Lack of proper commitment to escrow arrangements, inability of the State
Electricity Boards to provide adequate payment security cover to the private sector power
projects, which is a requirement of the project developers and more particularly the
financial institutional are some of the reasons due to which the majority of private sector
power projects could not achieve financial closure in spite of progressing well on other
fronts. Government have initiated the process of reforms with a view to improving the
financial condition of the various power utilities in order to make them commercially
viable. The States have accepted the need for power sector reforms. A consensus was
reached in the Conference of Chief Ministers/Power Ministers held in March 2001 on the
need to depoliticise power sector reforms and speed up their implementation. It was resolved in the conference to achieve
breakeven in distribution in two years time and achieve positive returns thereafter. It was
also resolved that State Electricity Regulation Commissions would be made functional
and tariff petitions filed and subsidy would be given, if required only to the extent of
State Government`s capacity to pay the subsidies explicitly through budget. The
Government of India has signed Memorandum of Understanding/Memorandum of
Agreement with States. These reflect the joint commitment of the Centre and the States to
undertake reforms in a time bound manner. Government have launched the Accelerated
Power Development and Reforms Programme to assist the States in improving their sub-
transmission/distribution system in identified circles and to provide incentive grants
linked to the bridging of the gap between cost of supply and average revenue per unit.
With effective implementation of reforms, commercial viability and the confidence of
investors in power sector is expected to improve and make their role effective.