Goa to de-privatise power purchase

Sandesh Prabhudesai
5 February 2001  



After getting its fingers burnt over privatisation of power supply, Goa has now worked out a system to de-privatise the power purchase, reducing the agreement to half of what it had agreed upon.

In return, the state government has agreed to grant sales tax exemption to the Reliance Salgaoncar Power Company Ltd, which is presently supplying little over 38 MW to the state authorities at the rate of Rs 4.50 per unit.

The agreement signed in this regard begins from June, stretching the reduction process up to December 2003 in six different stages, bringing down the PPA to 20 MW from 40 MW. The RSPCL has however already reduced 1.5 MW from this month, as per the arrangement worked out earlier.

Claiming it to be win-win situation, chief minister Manohar Parrikar says the net gain of the new agreement would be ultimately Rs 53 crore annually even after exempting sales tax on purchase of naphtha to the bare minimum - only 1 per cent if bought in Goa and 9 per cent if purchased from outside Goa.

While the electricity department was one of the few profit-making departments five years ago, it now incurs a huge loss after signing the PPA for a mini private power project of the RSPCL. Against Rs 34 crore paid to NTPC for around 200 MW, the RSPCL is paid Rs 150 crore for hardly 40 MW.

He blames his Congress predecessors for the mess it created in the power sector, while claiming that the department would start making profit once again by next year. The government has however also agreed not to hike power tariff till March 2004.

Goa is allotted 408 MW from the NTPC (the tiny state has no self-generating system), while its drawing capacity today is hardly 250 MW. It may add up 60 MW more by 2003 after a new sub-station is set up at Colvale in North Goa to draw from the Maharashtra grid.

The high court is yet to lift the ban it had imposed on new power connections due to acute power shortage. Though Goa's present peak load uninterrupted requirement is only 250 MW, the NTPC power would not be enough if its plans to develop the state industrially has to come true.

"We expect at least 100 MW more from our captive power policy", says Parrikar. While allowing private captive power plants to sell its power directly, the state is also planning the unique power banking system by March, which would allow the private plants to deposit its excess power in the state-run bank on a paper and buy it whenever required.

As the fever of privatisation has now subsided totally, Parrikar has taken a clear-cut stand not to sign any PPA with any private power generation plant, though generating and selling captive power directly would be the discretion of the private generators.

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