States' gripes: Fuel supply choke, delay in nod for infra projects

Last Updated: Thu, Dec 27, 2012 19:00 hrs

States were unanimous in flagging concerns over fuel shortage for power plants and delayed clearances hurting fresh investments in infrastructure.

Most states demanded coal linkages and corrections in energy pricing policy, apart from the usual requests for funding assistance, at the 57th meeting of the National Development Council (NDC) chaired by Prime Minister Manmohan Singh.

At the end of the meeting, Singh directed the Planning Commission to carry out a review of fuel availability for power projects and submit a report within three weeks.

Karnataka Chief Minister (CM) Jagadish Shettar told the NDC: “There are severe constraints in power sector on account of delays in coal linkages and environment clearances.” Karnataka is awaiting linkages for two projects of 1,320 Megawatt (Mw) despite power ministry’s recommendation. He also sought priority in coal allocation in the upcoming auctioning of blocks and gas for power plants in the state. As an alternative, the Centre could import gas and provide it at “affordable prices”, he said.

Punjab CM Parkash Singh Badal said coal allocation for three projects of 3,920 Mw capacity being developed by Sterlite, GVK and L&T is grossly inadequate. “Coal India should be asked to allot additional linkage of 7.8 million tonnes (MT) for these plants.”

Chhattisgarh Chief Minister Raman Singh sought a review of the coal price pooling mechanism being worked out by the Centre to make imported coal available. He said pooling will increase electricity tariff by eight paise a unit and cause financial distress for distribution companies. “I would strongly urge the government to exempt coal bearing states from pooling.”

He also sought a review of the viability gap funding (VGF) model for highway projects being implemented under the public-private partnership (PPP) mode. The PPP mode makes projects unviable for states with low traffic density, he argued.

West Bengal Chief Minister Mamata Banerjee emerged as the most vehement critic of the Centre’s fuel pricing policy. She asked for a review of the government policy of gradually aligning domestic coal prices with imported coal and asked for regulation of the sector to ensure infrastructure projects remained viable.

Banerjee requested higher power allocation from Bhutan for her state, and an increase in the Centre’s funding for projects in the second phase of the urban infrastructure scheme, JNNURM.

She also said development of defunct airport projects in the state should be taken up in the current Plan period.

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