Walk the talk

The government has to be more active when it comes to power generation projects

Rajesh Kalra Delhi

2006: Anil Ambani's Reliance Energy Ltd's (REL) attempt to set up a 12,000 MW power plant, the world's largest pithead coal-based power plant at a single location, in Orissa has run into unnecessary but expected problems. The eastern state realises that being power surplus, REL would have no option but to export all the power it generates. So, while REL makes profits, all that the state gets is pollution caused by the plant. Not surprisingly, the state is asking, what's in it for us?

For REL, the situation is tricky. It needs to be located in Orissa for that is where the plant's coal needs can be fed easily. In return, it is investing close to Rs 60,000 crore, which would offer direct benefits like employment for the state's locals, as also a host of other ancillary opportunities. The state government is however, reluctant to bend.
2001: Realising that River Yamuna, which provides water to the ever-thirsty Delhi, is reduced to less than a trickle during the lean months, the Delhi and the Himachal State governments decided that they should work on damming the river near lake Renuka. The idea being that this water could be released during the lean period. Once the idea gelled, it was mooted that since a dam would come up in any case, why not also have a hydel power project there, which too could be used to provide power to the national capital's never ending thirst for electricity.

But it is one thing to have grandiose plans, quite another getting down to brass tacks. The brinkmanship between the two state governments rapidly got out of hand and turned complicated. Who will invest in the power station? If both Delhi and Himachal were to invest, how much should their contribution be? What share of power should Himachal get? And so on. The discussion went on for a while, with Delhi demanding a sum from Himachal that the latter thought was way above what it should pay.

 Himachal's argument was that the lion's share of the benefit would accrue to Delhi, and since the state would take the burden of submergence too, it was impossible to accede to what Delhi wanted. Neither side budged. And finally the Himachal chief minister took a call: Who will use this water? Delhi! Who will use most of the power? Delhi! Whose area will get submerged? Himachal! Then why are we wasting our time? The result: Delhi frets and sweats and shamelessly draws the exhaustible ground water for its parched throats.

The two little snippets above are not to point fingers at the four protagonists — the three state governments and the corporate — but merely to give an idea of the ills plaguing an extremely critical infrastructure sector for the economy. At a time when the economy is galloping ahead at around eight per cent and the world is excited about India's potential and so on, the reluctance to see the writing on the wall when it comes to power is baffling.

It is common wisdom that for every single per cent growth in GDP, there should be a 0.6 per cent growth in power generation. But where do we stand? Since we cannot stop comparing ourselves with China for everything under the sun, it may not be a bad idea to see how we compare with the Dragon.

In 2004, China had installed capacity of 440,000 MW, almost four times that of India's 120,000 MW. And by 2005, our northern neighbour had added another 70,000 MW to reach 510,000 MW. Even if one looked at the annual capacity increase over the past 10 years, while China added on an average 22,000 MW per year, India was a laggard with a mere 3,650 MW added per year.