Power sector holds key for growth of Indian economy: DHI, Secretary

India Infoline News Service / Dec 11, 2009

While addressing at the National Seminar on Engineering, Procurement & Construction (EPC) of Power Project jointly organized by Confederation of Indian Industry (CII) and Department of Heavy Industry (DHI), Government of India in New Delhi today; Dr S N Dash, Secretary, Department of Heavy Industry, Government of India said that power sector is most critical for Indian economy and holds the key for growth of Indian economy.

He said that there is need for greater stress on the reforms in the area of distribution, as out of the generation, transmission and distribution; distribution is most critical for growth of the sector. Dr Dash said that government has taken various initiatives over the period of time like ‘Open Access Policy’, but some of these failed to take off due to lack of proper implementation at the state level.

He said pre-project activities are most critical for the successful and timely completion of the power projects. The same has been also indicated by a study done by McKinsey which reports that best in class power projects devote more time on pre-activity/construction activity as compared to the Asian average.

Dr Dash said there is need to work on initiatives like ‘Power trading and Power exchanges which could give a major fillip to the sector and facilitate investments. He said, in next 10 year, US$200bn would be required in power generation and similar amount would be required for power distribution.

Rakes Nath, Chairman Central Electricity Authority said in his keynote address that there is a need to have a long term perspective and advance planning. Now is the time to look at the 12th & 13th Five year plan so that the orders could be placed well before 12th plan and project could be commissioned for the 12th plan as per schedule.

He said, timely project commissioning is also linked to development of coal mines, coal block development need to be ensured for supply of coal to power plants as Coal India alone would not be able to meet the demand.

Nath further added that standardization is an important issue for the growth of the sector. He informed the participants that Model Contract for hydro project has already been prepared and is under process of legal vetting. He said private developers would be provided incentive for time or early completion of projects.

J P Nayak, Chairman CII National Committee on Capital Goods & Engineering & Member of the Board & President (Operations) Larsen & Toubro Ltd in his address said that deliberations on the EPC contracts for power sector assume significance from the very fact that the one third of the investment out of the total planned investment in infrastructure sector in the 11th plan is for the power sector. Hence sharing of the best practices would help in timely implementation/ commissioning of the projects. Mr Nayak said issues like non uniformity in placement of order, delay in upgradation of testing facilities at CPRI etc are also responsible for the slow capacity addition in the power sector.

He added that the economic recovery that started and is expected to do even better in coming quarters. But it would be essential for government to continue the stimulus package as it was instrumental in leading the economic recovery and is still required.

Mr Rajiv Bansal, Joint Secretary, DHI said that learning’s from the programme would be useful to both industry and policy makers. He said that sharing of the best practices should help implementing the power projects in India much faster.