PM panel to study credit crunch in power sector

Economy Bureau
Posted: 2008-11-07 00:44:54+05:30 IST
Updated: Nov 07, 2008 at 0044 hrs IST

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Mumbai, Nov 6 : Planning Commission member (energy) BK Chaturvedi on Thursday announced that the PM led panel will also look into the credit freeze in the power sector which proposes to have a massive investment of Rs 10.59 lakh crore to add 78,700 mw in the 11th plan.

“Its a temporary freeze. Of the Rs 10.59 lakh crore, generation will need as high as Rs 4.10 lakh crore, transmission Rs 1.40 lakh crore, distribution and rural electrification Rs 2.87 lakh crore, non conventional and captive Rs 1.15 lakh crore. The National Electricity Fund is proposed to be set up soon, the announcement of which has been made by the finance minister. It will be utilised mainly for transmission and distribution. However, for generation, a large amout of loan and funds both from domestic and foreign are needed,” Chaturvedi said. He said the PM led committee will look into the credit squeeze in the power sector and suggest necessary measures. Chaturvedi was speaking at the Power India 2008 conference cum exhibition organised by The India Tech Foundation.

FE had reported that the power minister Sushilkumar Shinde and power secretary Anil Razdan had revealed that the proposed investment of Rs 10.59 lakh crore will not be affected adversely due to the global meltdown. However, Shinde and Razdan said that banks and financial institutions have been informed to disburse necessary debt component to the project developers.

The power ministry has asserted that the projects, which have already achieved the financial closure, will not face any major problems. However, projects, which have to achieve financial closure, can be delayed.

Meanwhile, the project developers cited that the land acquisition is another major issue in the timely completion of projects proposed to be complete in the 11th plan. NTPC director (technical) RK Jain claimed that delay in lan acquisition will lead to corresponding delay in start of the project. “As stringent project schedule are targeted to make available power at an early date, land acquisition needs to be expedited and accorded top priority. Special land acquisition cells need to be created for expediting fixation of reasonable price for land. Early identification of land cor compensatory afforestation in case forest land is involved,” Jain said.

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