Let us examine what are the strengths of the private sector. The sector is expected to be competitive, efficient and provide power at reasonable rate. I am pushing for that, and they get upset. Somehow this is being seen as anti-private sector. Because of my negotiations, I have reduced the internal rate of return for the fast track projects by 1 per cent. The idea is to getcompetitive power from the private sector.

I understand that there is a campaign by some private sector companies to show that my assumptions are wrong. Bangladesh has been able to get privet power at three cent per unit. Is this too much to ask for? Companies in India can produce cheap power if they want to.

I am negotiating with the promoters of the three fast track projects to ensure that the power is sold at the right price. All three counter guarantees will be issued by the end of July. Currently we have sent them the drafts for discussion.

The entire delay has taken place because of the procedure decided by the previous Cabinet to thrash out the counter guarantees. The procedure was too long drawn out. There have beenover 40 meetings. There have been just too many people involved in the exercise. The power purchase agreements have been changed nine times. Consultants were brought in. Hypothetical risks were raised and discussed and factored in. Risks nobody had ever thought of, were brought in and discussed in great detail.

The private sector is upset now because they are not getting the security they want from us. Since we are the central Government, we can guarantee the foreign exchange risk for the project. But the other risks of payment has to be borne by the states.

The projects will never take off if the promoters keep asking for all costs to be covered. The PPAs would never end. These problems are ocurring because the purchasor of power is different from the guarantor. Counter guarantees have been delayed because the purchasor of power is weak.

This is a cabinet decision. Anybody who wants a counter guarantee for a project in his or her state will have to set up the SERC. If the centre is coughing up the money in case of risk, then the centre needs some cover too. SERC is the centre's guarantee against the state's non-payment. The centre needs safeguards too. The Finance Minister has made it clear to Tamil Nadu about the counter guarantee. There can be no controversy over this.

Yes I agree, that the state can put its own people in the SERC. But then the state Government cannot remove them at will if they do not toe theline. There are several posts today at the centre where the Government can make the appointment but cannot remove the incumbent easily and without scrutiny. There will be enough independence in SERC and they will not turn into SEBs.