India plans 5-year power sector reform -- Minister

India plans 5-year power sector reform -- Minister
ENS ECONOMIC BUREAU

NEW Delhi, Dec 6: India is working on a blueprint to completely reform its power sector in the next five years, Power Minister Rangarjan Kumaramangalam said on Monday. "We are drawing up a five-year schedule by which we will complete the reforms in the power sector," Kumaramangalam told the World Economic Forum's India Economic Summit, 1999.

The Minister did not give details of the plan. But he said his ministry would soon meet state Chief ministers and power ministers to build a consensus on pushing the reforms through.

India opened its power sector almost eight years ago allowing private and foreign firms to set up generation plants. But investments slowed because the cash-strapped State Electricity Boards (SEBs), the monopoly seller of power to consumers, were unable to assure payment for power purchased from developers.

The SEBs' inability to repay generators has resulted in private firms putting their projects on hold. Kumaramangalam said the power sector needed to record a growth rate of 14 to 15per cent per annum for the country to achieve an economic growth of seven per cent.

"The investment we hope will come from both private and public sector," he said. "What we need is for people to come forth and look at it as a long-term player and not a fly-by-night operator," he said.

India expects to make power available on demand by 2012, but would need to add about 7,000 mega watts of new capacity each year to meet its target. The country had 95,275 mws of installed generation capacity as of end-October.