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Power sector confused as minister, PM's aide make contradictory statements

A Special Correspondent

Prime Minister Atal Bihari Vajpayee's political advisor Pramod Mahajan and Union Power Minister P R Kumaramangalam have made contradictory statements on the crucial counter-guarantees for power projects.

While Mahajan said the Bharatiya Janata Party regime would not provide counter-guarantees for any power projects other than those already committed by the Centre, the power minister said such a facility could be extended if independent power producers supply power at competitive rates.

The statements have come as a rude shock at a time when the industry has been grappling with the confusion triggered by the sanctions imposed by the US following India's nuclear tests.

Addressing the media yesterday, Mahajan said the BJP was never in favour of the government providing counter-guarantee for any power project and would never be in favour of it.

Asked why the government had granted counter-guarantees to the pending fast track power projects, he clarified that the previous Congress government had given a commitment. The new government simply could not back out from the commitment, he added.

He ridiculed the Congress for criticising the government in this regard. ''The projects had been pending for the past six years. Ideally, these should have been cleared within three hours.'' He added the projects were sanctioned by the Congress regime.

He said the BJP-led coalition's national agenda for governance had specifically said that all the fast track projects would be given power construction status by December 31, 1998 and that 45 days were enough for the government to clear the projects.

The Congress should have congratulated the BJP for the early clearance to these projects, he added.

Addressing a technology seminar in Madras, the power minister said the Centre's bottom line in the power sector would be to reduce the cost of power to the consumers. Counter-guarantees would be one avenue to achieve this, he added.

In a bid to cut the power price, the Centre would ask the state governments to reopen negotiations for all the power projects.

Replying to US Consul General Michele J Sison's observation that the Indian government should not reopen a joint venture power project once it was finalised, the minister said this could be done if the deal was finalised within a particular financial year.

He said the Centre would not interfere with the memoranda of understanding signed by state governments. However, any deal would have to be completed within three months, he added.

He said nuclear power generation to the tune of 5,000 MW per year would continue to get priority as the country possessed the thorium-based fast breeder reactor technology. Thorium was environmental-friendly and could not be used for making nuclear bombs, he added.

Additional reportage: UNI