Sustained efforts to boost private sector investments in the power sector seem to be finally paying off. Most recent numbers show that installed capacity of the private sector has grown more than three times faster than the government sector (state and central), in the first two years of the 11th Plan. While the installed capacity of the private sector shot up by 32.8% in the first forty seven months (up to February 2009) of the 11th Plan that of the central and state governments rose by just 8.5% each.
Though some cynics may contend that the sharp pick-up in power capacities added by the private sector is because of its low base?it still accounts for only about 15% of the total capacity even now?the size of the additional capacity built shows that it is more than just a statistical blip. For instance, the numbers till February 2009 show that the private sector added 5,592 mw of capacity in the Eleventh Plan while the state sector, which account for more than half the total power generation capacity in the country, could install only 5,944 mw and the central government, with a one-third share, just 3,850 mw.
The pick up in performance of the private sector is also evident from its superior record in meeting the plan targets. While the private sector achieved 37.2% of the additional power capacity targeted for the sector in the Eleventh Plan period by February 2009, the state sector could only install 22.2% of the targeted addition. The worst record was that of the central government which could meet only 10.4% of the plan target during this period.
What is more surprising about the significant improvement of the private power in the generation business is that the states like Orissa and Haryana which were at the forefront of power sector reforms have fallen far behind other states in promoting private sector investments in power generation.
In fact the early numbers show that it was the western and southern States that made most of the gains in this segment. For instance at the end of December 2005 the Western region has registered the highest gains with its total power generation capacity in the private sector at 5,793 mw followed closely by the Southern region with its private generation capacity at 5,212 mw. Together these two regions accounted for more than four fifth of the private power capacity built till then.
The figures for 2009 show that the scenario has not changed significantly since then though the southern region has replaced the western region with the largest power generation capacity in the private sector. While the total power generation capacity in the private sector in the southern region went up to 9,771 mw that of the western region touched 9,467 mw.
Apart from regional inequalities what is more disturbing is the sharply skewed distribution of private power generating units in the states. Numbers show that till now not a single mw of capacity has been built in a dozen odd states including Orissa, Bihar, Delhi, Jammu and Kashmir, Sikkim and the most of the North Eastern states, the sole exception of Assam. The private power generation capacity distribution scenario turns worse when one accounts for the fact that the private capacity set up so far in states like Haryana, Punjab, Goa, Madhya Pradesh, Kerala and Assam was less than a percentage share of the national share.
So the bulk of the private power generation capacity set up so far was concentrated in a few states. Leading them was Tamil Nadu with 5,434 mw (24% of total capacity), followed by Maharashtra with 4,217 mw (18.6%), Andhra Pradesh with 2,126 mw (9.4%), Karnataka with 2,015 mw (8.9%), Chattisgarh with 1,156 mw (5.1%), West Bengal with 1,002 mw (4.8%) and Rajasthan with 696 mw (3.1%). These 9 states now account for more than 90% of the private generation capacities.
The role or significance of the private power sector in these leading states also varies substantially. In fact it was only in Tamil Nadu, Chattisgarh and Gujarat that private sector has come to occupy a major role with its share around a third of the total power generation. The share of private power in Maharashtra, Andhra Pradesh and Karnataka was just about a fifth and that in West Bengal and Rajasthan even much lower at around one tenth.
p.raghavan@expressindia.com