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Gujral suggests a Power Trading Corporation

Prime Minister I K Gujral on Tuesday mooted a proposal to set up a Power Trading Corporation to handle interstate transfer of power and financial commitments involved in the process.

Laying stress on the speedy implementation of reforms in the power sector, Gujral, who reviewed the power sector's performance at a high-level meeting, said that the proposed PTC would be a vehicle ''for smooth commercial operations in the sector.''

Power Minister Y K Alagh told newspersons that Gujral also directed that pending power projects be cleared quickly.

The prime minister will shortly write to state chief ministers to ensure faster implementation of power sector reforms. Gujral said the seven per cent growth rate in electricity generation achieved during the first six months of the current financial year must be maintained and efforts made to increase it further.

The meeting was attended by the power minister, the finance minister, the cabinet secretary, and top officials of the power and finance ministries.

The meeting also agreed in principle that the public sector power projects, not seeking budgetary support, can be approved without prior clearance from the investment board concerned.

In a significant move, the meeting decided that the finance ministry would urge the financial institutions to remove the 15 per cent sectorial cap for lending to the power sector projects.

Alagh said it was also decided that the viability of individual projects would be taken at the particular project level.

Alagh said it was also decided that the viability of individual projects would be taken at the particular project level, delinking viability of the project with the related state electricity boards.

The minister emphasised that the plan would in no way dampened the reforms process in the states. ''In my opinion it will enhance the plant load factor of various projects,'' he added.

During the meeting, the prime minister, according to Alagh, was keen that all mega power projects be approved at the earliest. Indications were that these projects would be cleared by the end of the current financial year.

The power ministry also raised the issued to captive coal mining, decks for which had already been cleared. The meeting has told that the orders for 100 per cent equity by the private and international firms for such captive coal mining were in the pipeline.

The power minister said that the counter guarantee for the four projects -- Bhadrawati, Visakhapatnam, Cogentrix and ST-CMS (Tamil Nadu) would be cleared by the end of December this year.

The prime minister also discussed the issue of conversion of the naphtha-based projects into gas-based projects. A review paper about the issue hanging fire would be put before him shortly.

According to official sources, the prime minister will shortly review the fuel linkages for various projects, including gas-based naphtha-based and coal-based power plants to remove impediments in the fuel supply. The petroleum ministry authorities will attend the meeting to be held shortly.

Gujral noted that the proposal for net budgetary support of around Rs 130 billion for the Ninth Plan had been sent by the power ministry to the Planning Commission.

UNI