With a long line of public sector companies slated to hit equity markets throughout this year, the government has decided to add sweeteners to boost their prices.
The process has taken off with the Satluj Jal Vidyut Nigam and is expected to be repeated for others, too. This means many policy hurdles that hinder the ability of these PSUs to compete against their peers in the private sector will be removed before the companies approach the markets.
A panel of ministers has decided to ask state governments to terminate a levy on promoters of hydropower companies that bid for projects in the state.
In essence, the levy is a premium that states insist companies have to declare at the stage of filling in the tender for the projects. Private sector power companies have been able to make the requisite commitments but public sector companies like SJVN are not able to do so as they have to get clearance from the Centre for each case.
?Private companies are able to pay premium to concerned
states for allocation of hydropower projects to them. The PSUs have not been able to pay any such premium. As a result, many hydropower projects that could have been given to PSUs have gone to the private sector,? says RV Shahi, a former Union power secretary.
?If we take a macro view, it does not matter whether a project is being developed by a PSU or a private company. However, if we look at it from the PSU point of view, they are definitely deprived of the opportunities to get those projects allocated,? he said.
?Therefore, either the central government should be able to convince the states not to insist on payment of such premium or PSUs should have the freedom to decide about premium payment and compete with the private sector,? Shahi told FE.
?Detailed project reports (DPRs) for some hydropower projects were prepared by PSUs. But subsequently, states allocated these projects to private players against the payment of upfront premium,? Anil Razdan, another former Union power secretary, pointed out.
?The whole idea of the national hydropower policy is that some tangible benefits of the project development should also go to
the people affected by the
project. The money received on account of upfront premium goes to the government?s kitty. However, it is not clear if the money is being utilised for the benefit of the project-affected people,? Razdan said.
