Mon, 22 Mar 2010
Financial Express

Don’t leave a leadership vacuum in the sector at this crucial hour

Noor Mohammad
Monday, Mar 22, 2010
The government wants to expedite the pace of capacity addition in power generation to overcome the growing power shortage in the country. That would entail faster decision-making at the top level in the power ministry. In that context, the role of the power secretary is critical. However, the government has not shown any sense of urgency or pragmatism in this matter. Rather, it has followed ad hocism in the appointment of power secretary ever since RV Shahi, a technocract, retired from the post in 2006.

As a result, schemes like the ultra mega power projects (UMPPs), which proved crucial in reviving the interest of private players in the Indian power sector, have started losing momentum and there is no one there who could be held accountable for that.

Significantly, in 2002, Shahi was brought in by the NDA government which was trying to push legislative reforms in the power sector at that time. That was an exception because the job of power secretary had traditionally been handled by bureaucrats.

The experience of having a technocrat at the helm of the power ministry proved quite beneficial. Shahi played a key role in the finalisation of the Electricity Act, 2003, which provides the legal framework for reforming the sector.

Shahi also took initiatives to evolve a consensus for liberalising the policy for allocating captive coal blocks to power generators. He knew that the power sector cannot grow unless domestic coal production improved.

He was also instrumental in launching new schemes like UMPPs and the merchant power project. These schemes proved key milestones in the government’s effort to attract private investment in the Indian power sector.

Shahi not only showed vision in charting out growth plans for the power sector, he also took personal interest to ensure that the schemes take off. If the government could award initial UMPPs like Sasan and Mundra in a time-bound manner, it was mainly because of Shahi’s efforts. As power secretary, he ensured that essential inputs like land acquisition, coal and water linkage as well as regulatory clearances were secured on time for conducting bidding for the selection of developers.

However, the UMPP scheme has now started losing its sheen, with the government unable to award the envisaged projects as per schedule. This is mainly because the government is not taking a long-term view while filling the post of power secretary in recent years.