Investment in power sector in Tamil Nadu has declined considerably in recent years and this is the main reason for trade bodies being sceptical of the power crisis getting resolved in two years.
Tamil Nadu Small and Tiny Industries Association (TANSTIA) vice-president KR. Gnanasambandan told ‘The Hindu' here on Friday that instead of increasing the budgetary allocation to the power sector to keep apace with increasing consumption, the allotment was actually declining.
Quoting figures from the Office of Chief Engineer (Planning), Tamil Nadu Electricity Board (TNEB), he said that the TNEB's Tenth Five Year Plan outlay for 2002-07 was Rs. 21,159.14 crore.
Giving a break up, he said that Rs. 12,497.67 crore was allotted for generation, Rs. 551.41 crore for renovation and modernisation, Rs. 7,000 crore for transmission and distribution, Rs. 500 crore for rural electrification, Rs. 110 crore for survey and investigation, besides Rs. 500 crore towards interest payment of the loans availed.
The Tenth Five Year Plan allocated, on an average, Rs. 4, 232 crore for every year between 2002 and 2007. However, expenditure declined to Rs. 3,676 crore in 2009-10.
Further, the next fiscal saw an even sharper reduction as the approved outlay for 2010-11 was only Rs. 1,004.65 crore. Even this sum was not just for generation as it was the total amount for all the six areas.
This decline was coming at a time when current consumption had almost doubled in the last decade.
The figures from TNEB show that from 510 kilowatt per hour (KWH) from 2000-01, per capita power consumption had shot up to 1,000 KWH by 2007-08 or about 100 per cent.
Installed capacity increased from 7,513 megawatt during 2000-01 to 10,122 MW by 2007-08, an increase of only 34.72 per cent. Further, only 180 MW of installed capacity had been added over the past five years.
As a result, power purchases had nearly tripled from 16,617 million units (MU) in 2000-01 to 45,629 MU by 2009-10. This exponential increase in purchase has had a major negative impact on the finances of TNEB as short-term power purchases were expensive.
While the TNEB's equity was Rs. 20,500 crore and had a reserve of Rs. 16,250 crore, its accumulated losses was Rs. 1.67 lakh crore and Rs. 80,000 crore was in deficit.
“In this situation, who will provide credit? Also, Government was insisting on TNEB to provide free power to farmers and huts without metering it. So, the TNEB was getting only a meagre amount as subsidy provided to cover this expense,” said Mr. Gnanasambandan.
The TNEB must be totally revamped and long-term financial support had to be assured to attract credit and investment.
Also, the norms for third party power purchases should be relaxed to allow for cluster of units, such as those in industrial estates, to purchase from captive power generation units such as wind mills.
At present, third party power purchase was restricted only to one unit.
