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Question of Power
The
Madhya Pradesh Government is divided over the issue of building a thermal
power plant in Singrauli. India Today's
Neeraj Mishra finds out why.
That
Madhya Pradesh desperately needs additional power is well
known. It is also a fact that a 500 MW thermal power plant has
been proposed in the coal belt of Singrauli to meet the shortage.
But ironically, the Government has been unable to make up its mind on
whether to go in for the project or not. The reason:
differences over who should be executing it.
Some engineers
led by board chairman S.S. Dasgupta and Power
Minister Bisahu Lal Singh are opposed to a move by the Energy
Department to ask the National Thermal Power Corporation to take up the
project. The department as well as independent experts from the Asian
Development Bank and the European banks believe that it would be best
if the department does not get into any more power generation projects
and concentrate
its meagre finances and energy on distribution. The Madhya Pradesh State
Electricity Board, on the other hand, believes that it has enough resources
to invest in a new power plant and it is its business to tie all ends
of power supply from generation to distribution to collecting money from
every door step. This has led to an unprecedented situation where a war
of words has broken out in the state Cabinet. The Cabinet, minus Chief
Minister Digvijay Singh and his deputies Jamuna Devi and
Subhash Yadav, supports the idea being propounded by Bisahu. This, however,
is the proverbial tip of the iceberg and hidden behind it are several
core issues within the Power Department which is on its last legs. Many
experts believe that any board which has an outstanding debt of Rs 16,600
crore and which is unable to pay its monthly power dues on time cannot
last for much longer without a fresh infusion of loans. But its credit
rating in the market is nil and its reputation is mud. The MPSEB accumulates
further losses of Rs 80 crore every month as its collections over that
period are in the region of Rs 360 crore while the expenses are Rs 440
crore.
It has faced
several embarrassing situations in the past on
account of non-payment of dues. The Power Finance Corporation has on two
occasions invoked its escrow and drawn straight from the board's bank
accounts. The situation is so desperate that the board has not been able
to deposit its employees provident fund for years now. It owes almost
everyone from employees to consumers to the Power Finance Corporation,
NTPC, NHPC, suppliers, coal companies, contractors and transporters including
railways. "To think of taking on another generation project is sheer
madness,'' says a department official.
On the face
of it, Bisahu denies that there are any differences
but accepts that while he and the board want to execute the
project the department would have none of it. "We would require
only about Rs 600 crore as our share in the Rs 2200 crore
project (the rest of the money is coming from the Power Finance
Corporation). We are easily in a position to invest Rs 150 crore
per year over the next four years,'' he says. He adds that
several hundred consumers and industries owe the board Rs 1,900 crore
which if collected can go a long way in solving its problems. There is
also a feeling among engineers that the department is now underestimating
their ability and deliberately trying to hand over the project to NTPC
engineers. "If we did
not have money then why did we invest Rs 500 crore in buying digital meters,''
asks a leader of the engineer's union.
But what
they are more agitated about is the reported negotiations between the
Power Department and NTPC under which the four existing plants at Birsinghpur,
Singrauli, with an installed capacity of 840 MW will be handed over to
NTPC. "The NTPC will be investing Rs 600 crore in four years but
in that time alone it will recover more than that by just selling us electricity
from our own existing plants at a higher rate,'' says Bisahu. He may have
a point but department officials inform that no rate
fixation has been done and when taken up will have to be within
the ambit of the Regulatory Commission so there will not be a
significant difference from the present rate of Rs 1.80 per unit
that the plants cost the MPSEB.
Furthermore,
department officials feel that MPSEB engineers
have not been able to exploit the potential of the existing plants
which return an average of 55-59 per cent capacity utilistion or
Plant Load Factor (PLF). On the other hand, all NTPC plants in the country
have a PLF of 80 per cent and above which means the presently installed
plants themselves will be yielding at least
100 MW more than they presently do.
But there
are two crucial questions to be explored which involve
both sides of the story. The first one is why does the
department want to give the NTPC the existing plants as well as the new
plant? What is the real reason? There are several answers but none stronger
than the fact that the state buys more than 1150 MW of energy from NTPC
and its monthly bills
are Rs 150 crore. It is seldom able to pay the whole amount and its outstanding
to NTPC alone is about Rs 529 crore. So the department wants that NTPC
take over the plants, run them for it and forget about the outstanding.
The secretary of the department Dheeraj Mathur disagrees: "We have
no such understanding with the NTPC. In fact we are negotiating for a
joint venture and we aim to take some Rs 1,500 crore from the NTPC for
the operating rights of the plants.''
The second
question is why the engineers' lobby wants to execute the new plant when
it is in such a financial mess? Amongst the several answers, none again
is strong because of the interest in construction. As the plant is built
the whole building cartel would be busy for the next four years and if
the existing plants are handed over to the NTPC the interest of the existing
coal and transport lobbies would be hurt. No, says
former power minister N.P. Prajapati. "The board is a complete body
which has engineers and personnel for everything from generation to distribution
to linemen. If we hand over all the generation to others, what would the
generation experts with
the board do. You can't stop paying their salaries so they will become
a further drain on resources.'' Strong reasoning on both sides but the
truth is somewhere in between.
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