The Hindu : Improve conditions for investment in power sector

Online edition of India's National Newspaper
Saturday, Mar 22, 2003

Business

Business

Improve conditions for investment in power sector - CII

By Our Special Correspondent

NEW DELHI MARCH 21. In its submission to the Ministry of Power's Group for Re-engineering of Policy, Systems & Procedures, the Confederation of Indian Industry (CII) has asked the Central Ministry of Power to improve conditions for investments in power generation and simultaneously work on improving overall viability of the sector through the implementation of distribution reforms.

The recommendations prepared by the CII in association with Ernst & Young with feedback from its members highlighted that financial and regulatory obstacles render India as an uncompetitive destination vis-a-vis China.

In India, investors spend the highest amount of time in dealing with public officials on regulatory and administrative issues in comparison with the time spent in China, Europe, OECD and Latin American Countries.

To facilitate private investments in the sector, the CII has called for radical change in administrative approval and clearances by completely doing away with clearances other than techno economic clearances.

Instead, parameters / norms could be notified for each clearance and the project developers could be asked to submit annual compliance to project agencies and the electricity regulatory commissions.

Non-compliance to prescribed norms should attract punitive penalties and cancellation of business authorisations.

For techno-economic clearance now being accorded by the Central Electricity Authority (CEA), the CII has suggested that economic clearance could be addressed through tariff-based competitive bidding and the CEA could continue to accord technical clearance to the thermal and hydel projects, however, within the specified timeframe.

While referring to the distinct clauses, the CII note underlines the procedural delays faced by the developers in obtaining clearances and approvals at the national and State level.

Suggestions and modifications on the various clauses have been included in the report to overcome the delays.

To accelerate development of hydro projects, reputed agencies should be engaged in DPR preparation, the process could be financed separately through government, multilateral and bilateral agencies.

Printer friendly page
Send this article to Friends by E-Mail

Business