Signaling the revival of his business group?s interest in power, Gopichand P Hinduja has written to Prime Minister Manmohan Singh, seeking his intervention in issues crippling the flow of foreign direct investment in the sector.
In the letter, Hinduja has claimed that speculators are often cornering coal mines and projects through auctions to sell them at a premium to genuine investors.
He has said that these problems, along with the unavailability of domestic fuel at competitive prices, the poor financial health of state electricity boards and the slow implementation of the Electricity Act, are taking a toll on investors? confidence in the sector.
At present, the Hinduja group does not have a significant presence in the sector, except that Hinduja National Power Company Ltd (HNLPC) bagged a contract to build the country?s first 1,040-mw fast-track power project at Visakhapatnam in 1994. But the project never got off the ground owing to land availability issues and other clearances.
The Hindujas have now decided to re-position HNPCL and has appointed former ONGC chairman Subir Raha as company chairman and executive vice-chairman of the Hinduja group (India).
Listing the lack of quick access to domestic fuel resources as the biggest handicap for power developers at a time when pricing imported fuel is considered risky, Hinduja?s letter says, ?For foreign investors, it?s a vicious cycle ? unless access to competitive fuel is assured, investment commitments will not come. Unless substantial project progress is achieved, coal linkages are difficult to come by.?
Hinduja also says the government?s process of allocating captive coal mines is ?long-drawn and unclear?? So, there is a ?mad rush for the few captive coal mines on offer. Some of the mines are already in the hands of speculators or non-users?.