We hope to light up 35 mn households by Dec: Power secy Ajay Kumar Bhalla

Ajay Kumar Bhalla
At a time when private power generators are under stress due to their debt woes, the government is pushing to get each rural household electrified under the Saubhagya scheme. In a free-wheeling interview on the achievement of 10 million milestone under the programme, Ajay Kumar Bhalla, secretary, power, spoke to Jyoti Mukul on various issues confronting the sector. Edited Excerpts:

How is Saubhagya progressing?

When we announced the Saubhagya scheme, we had an estimate of 40 million households which were to be electrified. Large number of them were in six states—Uttar Pradesh, Bihar, Odisha, Rajasthan, Assam and Jharkhand. When detailed project reports were prepared, the number of un-electrified households was about 35 million. We have already achieved electrification for 10 million households on Sunday. Initially, the pace was slow because things take time to fall in place. Sanctions have been issued and sufficient funds released. Now, the pace has picked up and since last week, more than a 100,000 houses are being connected every day. We need to take it to 150,000 by August-end and then subsequently to 200,000 houses per day.

The Prime Minister has asked us to advance the target from March 2019 to December 2018. We are likely to achieve 35 million by December. We will be putting the distribution companies in a challenge mode and are going to give some reward or maybe some other incentive.

What are the challenges being faced in the programme and in which states?

A large number of distribution companies are working on it in villages, so achieving this number is not very difficult. The biggest challenge is infrastructure completion before the houses are connected. Usually, connections are given in the camp mode where paper work is done, and then meters are installed quickly and power line is connected. The main issue, especially in states such as Uttar Pradesh, Assam and Jharkhand, is that a village was treated as electrified in the initial electrification phase but there are different habitations where hardly any electrical infrastructure was created. So there, you have to carry the line by building infrastructure. Uttar Pradesh has now gone for turnkey kind of assignments for this and engaged big companies. Districts have been divided among the companies. They are now mobilising material for building infrastructure.

Often power does not flow even if there is infrastructure, though Union power minister RK Singh has said there will be penalty on discom for load shedding. How will uninterrupted power be made possible? 

There is no problem as far as the generation capacity is concerned. We have surplus power. Also, we have sufficient capacity for inter-state and inter-regional transmission. One area which needs focus is intra-state transmission network, which in some states, is not very strong. Those capacities need to be added and distribution level strengthening under DDUGJY and Saubhagya needs to be done.

Provision of uninterrupted electricity supply is already envisaged in the Electricity Act and we are emphasising on it more through policy and also by bringing penalties through amendments to the Electricity Act. We want to sensitise discoms by telling them that you should have adequate power while being financially viable. Under Saubhagya, connections will be metered and we are proposing to go for smart meters with pre-paid facility.

Generation capacity outside PSUs is stressed even if it is not part of the stressed asset list. What will the committee, under Cabinet Secretary, do in this regard?

The committee will look into issues which the generators have raised. One is the issue of coal and transporting of coal to power plants where there are some constraints. Others are like lack of power purchase agreements. Market situation is improving with a pick-up in power demand. We ourselves led a pilot for contracting 2,500 mw of power without burdening discoms. The third issue is payment from discoms are delayed. Generators pay advance for coal and railway transportation but it takes 60 days for them to get payments, and then that is also delayed. The committee may examine some kind of payment security mechanism. All these issues are part of the TORs of the committee.

Do you think the committee can resolve these issues since they are endemic to the power sector and states will have to agree?

We can sensitise the state governments. We would involve them also. It is a multi-pronged strategy which would be needed. We need to get more coal and get it in time. Get PPA for power and payment process should start. Discoms must make payments and bankers should get their share and developers should also be able to run their plants. When we look at Uday data, we find that losses are coming down but long-standing dues from the government departments are much higher than the total book losses of all discoms put together.

Would the committee be going plant-wise?

I won’t be able to say this right now, but the Independent Power Producers Association of India as well as Association of Power Producers have made their submissions and the committee will look into it. The parliamentary standing committee looked into problems of each and every developer. We have all those submissions. It also suggested that a high power committee to be formed.

Is it RBI versus the government’s arguments in court?

The matter is sub-judice now. We started looking at 34 coal-based plants which were initially identified by the department of financial services as stressed power plants. Eight have been resolved and they are standard accounts because of SHAKTI and other measures. Fourteen are already in NCLT or in the process of admission into the tribunal. Twelve more are left of which 12,000 mw is the commissioned capacity. Of this, some are under resolution by lenders outside the NCLT. There are about 10 gas-based plants under the stressed category. Stress in these plants is mainly due to shortage of fuel. We do not have a readily available solution to this and we have been discussing the matter with the petroleum ministry.

Can issues be resolved within the 180-day extension that the government is seeking?

The report prepared by department of financial services has said that the commissioned assets be given more time. What we understand from the lenders is that these assets are either restructured or under bidding outside NCLT. Now, if the resolution can be reached, it should be done. The larger question is even if the assets are sold to others and bid out to others, the issues of coal and timely payment by discoms will still remain. This can make them stressed. The RBI’s view is that they have been given sufficient time and lenders need to resolve them quickly. 

What is the government doing to address the coal supply issue?

There is a production and dispatch plan. At times, coal is available on the sidings but rakes are less and vice-versa where more rakes are available but coal is less. That is what needs to be resolved. Despite higher dispatches of coal, we have not been able to build stocks at power plants which are located away from pit heads. Usually, stocks are built up during monsoon but this time due to higher generation the stocks could not be built substantially. Coal India has 35 million tonne stock. Besides, there are 15 mt stocks at our power plants also.

Is evacuation of coal still an issue since railway rakes have been given to power sector on priority especially to government plants while IPPs are complaining?

There is definitely no differentiation in allotment of rakes to private and PSU power developers. At times rakes were not available for forward e-auction coal about which IPPs have complained about.

When can we expect hydropower policy?

It is under inter-ministerial consultations. There are some plants that are under construction which are going to be commissioned in the next five years. We are working on what kind of support these plants would need.

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