Financial Express print this

Greed and power-deficit grid


THE cabinet committee on economic affairs, according to a report published in this daily Monday, has turned down a request from the power division to approve the evaluation process for the much-talked-about small power plant (SPP) project. The project was designed by the division in the backdrop of a persistent power crisis in the country. But the refusal by the cabinet body to approve the proposal on the plea that it had earlier okayed a guideline for SPPs in the private sector is being viewed by experts as a crippling blow to the move by the power division.
The government, about five months back, had decided to allow establishment of 23 gas-based small power plants in the private sector, capable of generating about 500 megawatt of electricity. This appeared to be a logical decision in view of the government's inability to mobilise its own funds to set up power plants in the backdrop of mounting power crisis. Moreover, the government has virtually failed to convince the multilateral donors of the imperatives for extending their financial support to the power sector. The donors stopped financing new power sector projects since mid-'80s. They have demonstrated their reluctance to finance projects in the sector as the government has failed to effect necessary reforms for removing irregularities and systems loss in the sector. The private sector entrepreneurs, particularly who have enough experience in power installations, responded positively to the proposal of the power division. But a deluge of proposals from all directions flooded the agency concerned. The ruling party lawmakers and other heavyweights either wanted to set up their own SPPs or lobbied strongly for others. The situation forced the power division to raise the number of proposed SPPs from 23 to 45. But that was not enough to cope with the demand and also the pressure coming from very powerful places. The multilateral donor agencies expressed serious concern over the developments relating to SPPs. Strong criticisms did also come from different quarters. The situation reached such a stage that the highest authority of the government had to issue later an order to review the matter altogether.
What has actually happened with the SPP proposal points to undue interferences by a few men in authority in a matter of great public importance. The country at the moment is experiencing an average daily power shortfall between 600MW and 900 MW. The residents of the capital are fortunate to bear up with a minimum of power outage everyday. But the people living in districts and villages are bearing the main burnt as they have to spend the most part of the day without power. The developments centering the SPPs have exposed the all-devouring greed among a section of politicians who tend to flex their political muscles to achieve undue financial gains. But the politicians alone are not to take all the blame. The businesses do also have a share in it. The latter very often employ political heavyweights to work in their favour in exchange for money. However, this is a very old practice. The nexus among corrupt politicians, bureaucrats and businesses has been very much in existence in the country. And their symbiotic relationship has rather thrived over a long period of time. Indeed, this has contributed to the country's standing as the most corrupt nation in the world for five times in a row.
The power division does deserve appreciation for coming out with the idea for setting up SPPs in the private sector. The government should not discard the proposal for all the unwanted developments. It is generally believed that had the genuine private entrepreneurs been given permission in time, a good number of SPPs would have been ready for power generation by now. Still there is time. The government should expedite the process and select entrepreneurs transparently on the basis of merit and experience in the power sector.