Engineers against MoUs with pvt players
Umesh Dewan
Tribune News Service

Patiala, August 16
Controversies pertaining to the Punjab Power Generation Policy 2010 refuse to die down.

After coming under criticism from the engineers working with the Punjab State Power Corporation Limited (PSPCL), now representatives of the All-India Power Engineers Federation (AIPEF) have also said the power generation policy, which empowers the state government to award the new power generation projects to the private players, through the Memorandum of Understanding (MoU) route, is not in the interest of the state and would lead to increase in the power tariff.

Chairman of the federation Padamjit Singh has stated that by following the MoU route, the SAD-BJP Government has violated the national tariff policy of the Union Government notified under the Electricity Act 2003.

“As per the national tariff policy, power projects are to be setup through competitive bidding, under Section 63 of the Electricity Act-2003. Setting up of the private sector plant, through MoU route is illegal and even the Union Government had moved the Supreme Court to uphold the provision of tariff policy regarding the competitive bidding. The MoU route gives the private sector players a free hand to inflate capital costs and claim higher tariff that will affect the power consumers of the state.”

Notably, some days back, the power sector experts and the engineers had stated that power tariff in the state would go up in the future, just because of not awarding the power projects through competitive bidding process.

Meanwhile, defending the state government on the issue, SAD spokesperson Mahesh Inder Singh Grewal has said according to the Union Power Ministry guidelines, the process of competitive bidding was best suited when the government had land and coal linkages.

“When both these rare commodities are elusive, the MoU route was the best solution to meet the challenge of growing power needs of the state to match its development,” he said. Grewal added that Punjab was not the only state, which has taken the MoU route as one of the methods for accelerated addition of power generation capacity. “Many other states like UP, Orissa, Bihar have opted this approach instead of adhering to the usual competitive bidding model,” he said.

As per National Tariff Policy

n--- Power projects are to be set up through competitive bidding under Section 63 of the Electricity Act-2003

--- Setting up of the private sector plant through MoU route is illegal

-- The MoU route gives the private players a free hand to inflate capital cost and claim higher tariff affecting the power consumers