The mid-term appraisal of the Eleventh Plan, now on the Internet without much fanfare, giving way to the tweeting on the Twelfth Plan, is a readable document, full of information and assessments. It wounds but does not strike unlike its predecessor, the mid-term appraisal of the Tenth Plan. It is best on electricity just as its predecessor was on agriculture. According to the Planning Commission, ?The likely growth of supply in first three years of Eleventh Plan works out to 5.59% as compared to actual growth of 5.32% in the Tenth Plan period.? But generation efficiency seems to be peaking as a source of growth since plant load factors now are not increasing, actually going down from 78.6 to 77.2, we learn on page 322. As regards transmission and distribution, India by now has one of the largest high-voltage direct current transmission capacities at around 1,500 circuit kilometres (ckm), which is to rise to 1,600 ckm. The 765 kV lines are at 1,088 ckm and will reach around 2,500 ckm. And 400 kV lines of around 17,000 ckm and 220 kV lines of around 17,000 ckm will be doubling in the next two years. India has the largest capacity in high voltage DC lines in the world.
But there are problems. ?Although the power transmission segment has been opened to private investment in 1998, there has been only limited success in attracting private investment.? They lament. I also cry, since I was the power minister in 1998 and got the contentious Transmission Bill through a parliamentary committee unanimously. They go on to say: ?Although the power transmission segment has been opened to private investment in 1998, there has been only a limited success in attracting private investment. The only public-private partnership project?the Tala transmission system?has been operational since May, 2007.? But this is not true.
The first project was approved and implemented in the late 1990s, but once that reform was given up, the memory of that investment also seems to have vanished, for the Commission is too professional to deliberately be incorrect. In 1997, foreign direct investment approvals reached Rs 25 billion from less than a tenth of that earlier and actual inflows reached around Rs 10 billion from nothing earlier. In his analysis, Kandula Subrahmanian, a good historian of power, notes in his book published by the University of Pennsylvania, ?The framework of this draft legislation (Parliamentary Committee approval to the Transmission Bill discussed above; parentheses added) was used to approve the first major private transmission project in Mangalore in India in 1997, by YK Alagh as minister.?
(K Subrahmanian, p 40-41). Subrahmanian notes that, ?The National Grid of the UK, which was to execute the Mangalore transmission project, is the only foreign utility company in India maintaining operations to date. That (the legislation) was cleared only in 1998, and to date there have been no private investments in the transmission sector. (p 41).? Foreign direct investments dried up in the period 1999-2005 and by 2001 was close to zero. Approvals declined to less than a tenth by 1998 and reached close to nothing by 2004 and so did actuals. The legislative policy failures and management of the political fallout have tremendous consequences. So do successes in political management. There is now revival in FDI in generation projects, but not in transmission and, therefore, the lament of the Planning Commission this month on limited success in private investment in transmission.
Another issue the Commission ruefully notes is that AT&C losses are rising and tariff reform is few and far between. T&D losses at the national level were at 29% in 2006-07 and are expected to fall to 27% in 2007-08. But AT&C losses are reported to be over 30%. While T&D losses are technical losses incurred in transmission and distribution of electricity to the consumer, AT&C represents aggregate technical and commercial losses, which estimates commercial losses (covering theft and deficiencies in billing and collection).
They give fascinating cases of reform and a table of best practice cases, but being good guys don?t say that it is the politics stupid! Nobody who is anybody is saying this is rotten. We have the technology and the proven capacity but not the will to cover the last mile. Some day it will again turn around. Until then happy tweeting on the Twelfth Plan.
?The author is a former Union minister