NEW DELHI: Minister of State for Power and Commerce Jairam Ramesh on Tuesday asked the Planning Commission to carry out a full review of the current Gadgil Formula based sharing of power from power projects as the ``unhappy” State governments were finding it ‘unattractive,’ leading to private sector edging out the public sector companies on bidding for various projects across the country.
In a letter to Deputy Chairman Planning Commission Montek Singh Ahluwalia, the Minister of State for Power has stated that it was important that this formula should be reviewed to ensure the healthy growth of the central public sector units (CPSUs) in future. “The experience has been that the home State is unhappy with this formula and feels aggrieved saying that it provides the land and water, it bears the resettlement and environmental costs but its share is not proportionate to the burden it is being asked to bear,” the letter states.
He cited an example of the 840-MW Kahalgoan power project in which Bihar’s share is just 79 MW.
This, Mr. Jairam said, had made a number of State governments going slow on project proposals by the public sector power companies on the grounds that their share was simply not attractive enough. The private sector was able to edge out public sector power companies on this score alone, he added.
On the other hand, the Power Minister said, in the Simhadri project of NTPC, Andhra Pradesh gets the full share of the first stage of 1,000 MW. The Indira Sagar project of NHPC in Madhya Pradesh was another such example. “But these are extremely special cases and there seems to be a feeling that it should not be adopted widely,” he added.