Power sector woes
Apropos of your edit “Readying to trip” (March 17), the power utilities’ plight is a result of populist policies followed by politicians cutting across the party lines. The AAP in Delhi is accusing the discoms of making huge profits at the cost of hapless consumer and has asked the CAG to audit them, but the party ought to know that the cost of power from state-owned NTPC is R6.05 per unit. The power tariffs are fixed by the electricity regulator and not by the government and that leaves hardly any room for reduction in tariff. The politicians are afraid of raising tariffs to reasonable levels or cracking down on power theft for fear of a electoral and political backlash. The sector also has a classic case of moral hazard—everybody assumes that the Centre will organise another bailout ever so often. The Centre would have to take action on several fronts simultaneously. By and large, the tariffs are, on an average, 20-30% lower than the cost of generation. Most of the ultra mega power plants of the private sector are passing through financial strain. Unable to source sufficient domestic thermal coal, these power companies have been faced with the dilemma of either running their coal-fired power plants at well below optimal generation rates and/or sourcing expensive, dollar-denominated imported thermal coal. Both choices have resulted in many of the private listed power companies reporting operating losses over a sustained period of time. The power based on imported coal is estimated to be of R5.4-5.70/kWh and the PPA signed is almost at the half of this price. How long this can go on?
Apropos of your edit “A sad day”, poor Manmohan Singh! He is fully aware of the fact that the current predicament he finds himself in is the result of the Congress’s two power-centre policy. He has to shoulder the blame for somebody else’s wrong-doing. In short, he was occupying the highest political office in the country only to get sacrificed at the altar as a scapegoat, and nothing more.
Passing of a giant
One of the rare journalists who upheld liberal values, Vinod Mehta was the voice of reason India needed today. Sadly, his passing has left us with very few able editors who can be named. With most editors (and the media, in general) kowtowing to the proprietor who, in turn, must shake hands with politicians, the likes of Mehta are much-needed. It is not just about liberal values, though. It is about the logic and factual accuracy that backs such values. Not many would agree, but the current crop of mediamen (and women) don’t have the kind of strength of these two factors that is needed to make media the rightful fourth estate.
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