New power policy anti-consumer: Experts
Say MoU route, instead of competitive bidding, for awarding projects may see pvt firms hike rates
Umesh Dewan/TNS

Patiala, August 7
Even as the Punjab Government went on a power project awarding spree over the past one year, experts in the field claim that the MoU (memorandum of understanding) route, instead of competitive bidding, chosen by the SAD-BJP regime would “certainly make electricity costlier”.

In all, the government awarded projects with a combined generation capacity of 5,320 MW. The estimated cost stands around Rs 26,600 crore. On June 21 last, the government had notified its new power generation policy, as per which it could award any thermal project by signing an MoU with a private firm.

And the government went ahead with its plans despite the Punjab State Electricity Regulatory Commission (PSERC) advising against MoU route. The PSERC, in a letter to the government, even mentioned that the new policy was “purely aimed at encouraging private investment in the generation sector in the state, a step that would result in higher power rates to consumers”.

Though senior Punjab State Power Corporation Limited (PSPCL) officials are tight-lipped over the issue, The Tribune has in its possession documents showing details (see box) of various projects signed with private players through the MoU route.

PSEB Engineers’ Association president HS Bedi said: “At the Centre-level, the Central Electricity Regulatory Commission had, in its advise to the Union Government, stated that thermal plants set up through the MoU route are costlier than those set up under the state sector.”

Bedi said through the MoU route, the rates are fixed by the regulator on cost-plus basis, “a process that would deny affordable power to the consumers of Punjab”.

A senior power sector expert, Padamjit Singh, said that “the government, as per the new policy, was covering the risks of the plant developers, but the profits would only be pocketed by the private companies. “A far better alternative would have been to set up a plant in the state sector, which will certainly give low-cost power,” he asserted.