Officers' associations of major public sector power undertakings have warned of a crisis in the energy sector if the government's liberalisation policy in power generation and distribution is pushed through. The officers' association of the National Thermal Power Corporation, Bharat Heavy Electricals Ltd and Central Electricity Authority have submitted a memorandum to the effect to Prime Minister P V Narasimha Rao on October 13.
The memorandum lambasts the government's present policy in the power sector as being dictated by international aid agencies to provide an extended market for recession-hit MNCs and short-run benefits to a few private Indian companies. Ashok Rao, president of the National Confederation of Officers' Associations of Central Public Sector Undertakings, says, "There has been no technical evaluation of the impact of these policies on the future of the Indian economy."
According to the memorandum, the new liberalisation policy will render redundant the power equipment industry and indigenous technical capabilities. The cost of inviting the private sector to create additional generation and transmission capacity will be high, as India has a shortage of investable funds, says the memorandum. It also questions the legality of giving concessions to private and foreign investment while denying them to investments made by Indian corporations.
Officials in the power ministry, however, deny any knowledge of the memorandum. Says a senior official of the Investment Promotion Cell of the ministry, "For the first time we have created conditions to promote investment and healthy capacity expansion in the power sector. This should be good news for anyone interested in the long-term development of the country."
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