1 Lakh MW Capacity Addition in Power Sector in 12th Five Year Plan 60% to be Contributed by the Private Sector May 14, 2010

Construction industry plays an import role in the development of infrastructure. In India, construction industry accounts for 40% of the total investment in last 50 years.

In power sector, the year 2009-10 accounted for the highest capacity addition i.e. 9,585 MW in a single year in the last 60 years. Altogether in the 11th five year plan 62302 MW capacity is likely to be added in the power sector. The government is now planning to set the target of achieving 1 lakh MW capacity addition in the 12th Five Year Plan. 60% of which is expected to be added by the Private Sector. This was stated by Hon’ble Minister of Power, Mr. Sushil Kumar Shinde, while addressing the Construction Summit 2010, organized by the Confederation of Indian Industry and Construction Federation of India.

He also added that in terms of contribution to the total installed capacity, the share of private sector has grown from 4% in 1990 to 11.5% in 2006, and further to 18% as of date. During the current plan the capacity addition of over 19,000 MW is likely to be added in the private sector which is nearly ten times of the capacity added in the private sector in the tenth plan.

Mr. Shinde also emphasized on capacity building of the construction industry, quality of civil works and need to improve project management through an efficient dispute resolution mechanism, harmonious approach to PPP projects and raising of finances.

Mr. B K Chaturvedi, Member, Planning Commission, pointed out the challenges confronting infrastructure development that need immediate attention – problem of project implementation; environment clearance; dispute resolution mechanism and skill development. To attract private sector participation he stressed on the need for regular revision of tariffs and user charges.

Mr. Y M Deosthalee, CFO & Member of the Board, Larsen & Toubro Limited, emphasized on better Project Preparation, Resolution of Issues related to Land Acquisition, Building Capacity and Skill Development in construction industry and the need to opt for a single window approach for clearances of all the infrastructure projects. He also referred to the recently announced 50,000 cr fund by the Planning Commission which he believes would help support India’s trillion dollar infrastructure spend.

Mr. Ajit Gulabchand, CMD, HCCL and President, CFI, emphasized on the importance of construction industry in the development of infrastructure. For fuelling the economic growth and sustainable development, there is a need to develop new methods for strengthening construction industry by looking at the needs of the industry