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Power sector unaffected by sanctions, full foreign equity okay in Rs 15 billion projects

The ongoing projects in the public sector with committed external assistance are not likely to be affected by the sanctions, Power Minister P Rangarajan Kumaramangalam informed the Lok Sabha on Monday.

The minister said the government has not perceived any reluctance in foreign companies to pursue their proposals on account of the sanctions and downgrading of investment rating.

Kumaramangalam told another MP that a decision has recently been taken on the basis of which projects for electricity generation, transmission and distribution of power produced in hydro-electric power plants, coal- and lignite-based thermal power plants, and oil- and gas-based thermal power plants will be permitted foreign equity participation up to 100 per cent on the automatic approval route, provided the foreign equity in any such project does not exceed Rs 15 billion.

Minister of State for Surface Transport Debendra Pradhan said the government has recently issued guidelines to encourage the setting up of port-based captive power projects by the private sector.

One of the areas identified is related to setting up power plants for ports on build, operate and transfer basis, with maximum concession period up to 30 years.

The private party is to be selected by the port trust on the basis of competitive bidding. The guidelines of the ministry of power and other authorities like the Central Electricity Authority have also to be followed and clearance, if any, obtained. The developer of such power plants may sell the surplus power in the market after meeting the requirement of port.

The government also informed Parliament that keeping in view the present and projected future offtake of coal by various sectors, the indigenous coal reserves are likely to last over 100 years.

The potential alternate sources of energy in the country are hydel, nuclear and non-conventional energy like solar and wind energy. Thrusts have been given to exploit these energy sources to their optimum levels.

According to the Economic Survey 1997-98, the actual inflow of foreign direct investment in proportion to approvals has gone up from about 19 per cent in 1995 to about 21 per cent in 1997 (up to November 1997).

Minister of State for Industry Sukhbir Singh Badal told the Rajya Sabha that the government has advised the administrative ministries to initiate specific steps for restructuring of the PSUs and report on a time-bound basis.

UNI