ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Power Tariff Scam Gets Bigger at Rs 50,000 crore

The dimension of the scam relating to inflation of power tariffs by, among other things, over-invoicing imported coal has become considerably bigger. It has now come to light that electricity generating companies are seeking to obtain compensatory tariffs from regulators. In addition, particular firms in the Adani and Essar Groups, have allegedly over-invoiced imports of equipment. The total size of the scam is currently estimated at Rs 50,000 crore, if not more.  

How Over-Invoicing of Imported Coal has Increased Power Tariffs

Forty of India's biggest energy companies are being investigated by a wing of the Union Ministry of Finance for over-invoicing of imported coal. The artificially higher prices of coal have been passed on to electricity consumers across the country. The scam is conservatively estimated by government officials at no less than Rs 29,000 crore, a third of which is in the form of higher power tariffs. Big names from the corporate sector, notably the Adani group and ADAG, are being probed for their alleged involvement in the scandal. An exclusive report.

Private Thermal Power in a Liberal Policy Regime

The extremely liberal regime ushered in by the Electricity Act 2003 allowed a few existingprivate captive thermal generators to make handsome profits, particularly in certain regions with perceived advantages in terms of availability of coal and water. But the majority of proposed projects were abandoned without cost to the communities of the area they were to be located in. Of the rest, only a few are operational with partial capacity, while others are under construction with delayed schedules or have gone into limbo. A critical analysis of the development of private thermal power projects over a decade.

The Political Economy of Power

India has taken a long time to arrive at a reasonable direction for the improvement of the power sector. For long it has been difficult to strike a proper balance between the commercial viability of the sector and the imperative need to make power available even to those deficient in resources to pay for it. This paper discusses the various issues in the sector and the present state of the reforms programme. It sees some room for hope growing understanding of the sector that seems to have developed among policy-makers.

Environment, Food Security and Natural Resources

The Tenth Plan Approach Paper has many interesting and progressive elements, but also many prescriptions that are likely to cause further destruction of the environment, food security, and people's natural resource-based livelihoods. There is no clear and coherent thrust towards integrating these concerns throughout the paper, within all sectors. Even at this late stage, it would be fruitful for the Planning Commission to set up a group of independent persons to consider ways of achieving such integration.

Questionable Economics of LNG-based Power Generation

In recent years, liquefied natural gas (LNG) has become the preferred option for power generation. This paper unravels the process of this shift away from coal-based power generation and makes an economic comparison of LNG-based generation with its competing options. As a sensitivity analysis based on cost variations of components revealed, in most cases, coal-based generation turned out to be a cheaper option. Though experts have spoken up for LNG's environmental friendly nature, questions still remain even as India's extensive coal reserves remain poorly exploited.

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