The Federal Minister for Power Sushil Kumar Shinde revealed that he has in
concept agreed to grant one mega power project capable of producing 4000
megawatt (MW) to
Tamil Nadu (TN)
in addition to the other 7 states. However, he did not reveal how he will fund this project or what the proposal from TN he has pre-approved will entail.
Shinde had previously
added 2 states to the initial list of 5 in a similar manner and has still not said how the funding of Rs. 16,000 crore (USD 3.5 billion) will come from. The
Life Insurance Corporation (LIC) had
promised funding for the first 5 projects through a special purpose vehicle but it is not clear if it is signing up to assume the whole project. Also, this sort of ad hoc addition of states to this list shows a lack of strategy, targets, and a process to address power issues in India. After all, adding more projects will only increase the complexity of financing. Also, the concept of pre-approving the proposal smacks of nepotism as Shinde would not know what is being proposed.
Shinde has also been lenient on the Tamil Nadu Electricity Board (TNEB) to not comply with the Electricity Act of 2003 which requires a “reorganization” separating the power generator from the transmitter from the trader. The reason for the legislation was to remove the inherent incestuous tendencies in the current system and it is not clear why TNEB has been “granted a few more months.” Although, many other states have also not complied with this legislation as it restricts the scope for corruption.
TN has also requested Shinde to arbitrate disagreement with
Karnataka over the Cauvery Hydropower Project capable of generating 1150 mw to compute an equitable division of generated power.