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Goa grapples with power crunch and new privatisation plan

Sandesh Prabhudesai in Panaji

It is Goa's sixth power policy in the last four years the one-month-old Congress government is now drafting, rejecting its own policy adopted in July 1998.

The tourist state, however, continues its struggle for more power as industrial development has ground to a halt due to the high court ban on new power connections imposed in July last.

The Luizinho Faleiro government plans to corporatise its electricity department for transmission and distribution while allowing private generation through competitive bidding and power purchase agreements with the proposed corporation.

Although Power Minister Dr Wilfred Mesquita had said that all the decisions taken by the erstwhile Wilfred de Souza's coalition government would be reversed, he does not wish to go ahead with the opening up policy that would enable private generators to sell power directly to the consumers.

Mesquita plans to seek the state cabinet's approval for setting up a corporation for transmission and generation in a professional manner. The coalition government had deferred a decision in this regard.

Going against de Souza's decision not to set up the state Power Regulatory Commission, Mesquita has decided to continue the procedure as it has already been notified. The one-man commission would primarily fix the tariff structure for consumers.

Although Mesquita has decided to reject the detailed study plan submitted by the International Finance Corporation to privatise transmission and distribution, he is fully in favour of its proposal to introduce the energy tax at different levels, by preparing slots on the basis of the unit consumption.

There would not be any subsidies. However, any consumer using minimum units of power would be exempted from the energy tax. The revenue would be used for improving the infrastructure, adds Mesquita.

The state presently draws around 220 mega-watts from southern and western grids of the National Thermal Power Corporation at the rate of Rs 1.33 per unit while the privately generated power would approximately cost around Rs three per unit, based on which the average tariff would be worked out.

The power situation in the state is expected to stabilise after commissioning of the 40 MW private project of the Reliance Salgaoncar Private Limited, only in terms of meeting the uninterrupted power requirement of 258 MW, against the present availability of 220 MW.

However, surprisingly, Mesquita is not in favour of scrapping the PPA that RSPL has signed with the Mormugao Port Trust to sell its additional 10 MW power it would generate, though his government plans not to allow direct sale of power. "What can I do with the PPA signed in the past?" he asks, though the de Souza government had decided to scrap the PPA.

In fact, this firm stand of de Souza had become the bone of contention to topple his three-and-a-half-month-old coalition government, with reportedly active participation of Dattaraj Salgaoncar, the son-in-law of Dhirubhai Ambani heading RSPL.

De Souza, confirming the news, had even commented after his downfall that the new government had come to power on the issue of power and it is bound to reverse all his decisions, which were affecting a particular lobby in the private power sector.

Although RSPL was also reportedly interested in transmission and distribution, Mesquita has however preferred to seek cabinet approval for corporatisation of his own department.

The power department's current annual revenues are at Rs 840 million. The department officials feel such a source of big revenue should not be handed over to the private sector.

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