The power ministry?s proposal on using the public-private partnership route to meet electricity generation targets in the 11th Plan has a rationale that may not be immediately appreciated. The public sector?s record in building power generation capacities is better than the private sector?s at this point. So, combined with the ability of the private sector to mobilise resources, that is the formula the ministry hopes will reduce the sizably large delays in meeting targets set under each Plan. Overall trends show that there has been a slow improvement in building targeted capacities in the power sector, from 47% in the Ninth Plan to 51% in the Tenth Plan and further to 57% in the first 16 months of the 11th Plan. However, there are variations within the broad trend. Numbers for the Ninth and Tenth Plans show that while the ratio of targets met has gone up from 38% to 55% at the Central level, it has dropped from 88% to 52% for the states over the same period. One reason for the poor performance of states is the dwindling resources committed to investments in the power sector?it is down from Rs 20,467 crore in the first year of the Tenth Plan to Rs 19,372 crore in last year. However, despite the large gaps between targets and achievements, the record of public sector units both at the Centre and in the states remains better than that of the private sector, where the ratio of achievements to targets has gone up from 29% to 38% only over the last two plans.
The reasons for large slippages in targets in the power sector vary. While the timely availability of equipment has been the biggest stumbling block in the case of thermal units, other problems like inadequate resettlement & rehabilitation procedures, delays in the award of environmental clearances and work contracts, court cases, and law & order problems also remain major handicaps. The public sector has a generic advantage in tackling some of these procedural issues with government backing. The financial clout of the private sector is now considerable?annual investments have gone up from Rs 12,926 crore to Rs 23,825 crore in the Tenth Plan and now exceed that of the states. This should be used to meet the investment shortfall. Many ideas have been tried out on power. Hope this one works.