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Volte face in Goa over power privatisation

Sandesh Prabhudesai in Panaji

In a sudden volte face, Goa's new coalition government has dropped all the modified proposals for privatising transmission and distribution of power.

Private power generation would be now permitted only by competitive bidding and by signing the power purchase agreement to sell it to the government.

The Wilfred de Souza government has also decided to sell the excess power of 100 megawatts which it is unable to wheel from the National Thermal Power Corporation in spite of allotment, through Fusion Energy Technology Private Limited, a Bombay-based private firm, who would pay 10 paise per unit to the tourist state.

Announcing the major policy decision after the cabinet meeting on revision of the power policy adopted by the erstwhile Congress government, de Souza said the public as well as the government would benefit from it.

After spending around Rs 10 million on a report prepared by the International Finance Corporation on privatising transmission and distribution, the government has now decided to terminate the proposal. It also cancelled the loan it had sought from the Power Finance Corporation to pay further consultancy fees of Rs 55 million to the IFC.

"This proposal was allowing all the meat to go to the private concern while government could be left only with bones," said de Souza. The Cabinet however has deferred the decision on corporatising the state power department.

Private generation would be allowed even in future, but by inviting competitive bids, power minister Sadanand Malik had proposed that the department be converted into a corporation. His idea was to retain the monthly revenue of around Rs 70 million and utilise it for the infrastructural development.

But his cabinet colleagues are believed to have raised objections since this would reduce fund allocation of other departments as the system of the power revenue going to the common pool would discontinue.

The decision however would hit the Reliance Salgaocar Private Limited, who has to now cancel the PPA signed with the Mormugao Port Trust for sale of their ten megawatt to be generated after converting its mini power project into combined cycle. The PPA it had signed earlier with the government to sell only 40 MW, will have to be now revised to sell the whole 50 MW of power.

Noticing that several industries like the Sesa Goa, having its own captive power generation plants, were planning to sell its excess power to other industries, the cabinet has also made it compulsory for all such plants to sell the excess power to the government.

Bringing back the four-year old policy into action, the government would now invite bids for mini power projects, including the barge-mounted ones, says Malik.

With the state getting only 210 MW of power from the NTPC, the tourist state needs additional power generation to meet its requirement of around 300 MW, even after the RSPL project of 50 MW is commissioned by December.