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Power Industry Pitches for Moving to 100% Tariff Based Competitive Bidding to Attract Investment

The suggestions were put forward by representatives of power industry in a day-long session chaired by Minister RK Singh to seek stakeholders' views for a five-year vision document for energy sector in the national capital.

PTI

Updated:July 1, 2019, 8:10 PM IST
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Power Industry Pitches for Moving to 100% Tariff Based Competitive Bidding to Attract Investment
A file photo of Power Minister RK Singh.

New Delhi: Power industry on Monday pitched for moving towards 100 per cent tariff based competitive bidding for energy and renewable sector projects to attract investment and make services affordable for consumers.

The suggestions were put forward by representatives of power industry in a day-long brainstorming session chaired by Power and New & Renewable Energy Minister RK Singh to seek stakeholders' views for preparation of five-year vision document for energy sector in the national capital.

"Most of the people present in the meeting supported the view of doing away with all exceptions in tariff policy to move to 100 per cent tariff based competitive bidding (TBCB). Besides, industry leaders pitched for building strong incentives for early completion of projects and disincentives for delays," according to a source.

In the power sector, the government has been allotting various projects under nomination route where tariff is determined by the power regulator on cost plus basis.

This practice generally discourages competition in the sector and imposes high tariff on consumers. But the government does that for strategic reasons like projects in border areas or bilateral ventures or for grid stability and security in case of renewables.

The industry representatives pointed out that the TBCB projects are cheaper and are built ahead of time, and said the power ministry brought in early commissioning provisions only when private sector entered, particularly in energy transmission.

They also said the TBCB will be the only mode of implementation in renewable power as the country needs to bring down the unit cost of transmission as utilisation is much lower in renewable energy scenario.

They also claimed that the tariff remains 30 to 40 per cent lower in the TBCB projects.

There were also some discussion on setting up a council with the Centre and states on board to expedite resolving issues related to power and clean energy sectors.

Meanwhile, Project Management Institute (PMI) and KPMG India in consultation with Ministry of Statistics and Programme Implementation (MOSPI) has jointly released a study titled "Revamping Project Management: Assessment of infrastructure projects and corrective recommendations for infrastructure projects".

The study recommended to invest heavily in pre-planning and site investigation, implementation of collaborative and agile planning, reforms in procurement process and strengthen contract management and implementation of lean construction principles for productivity improvement.

It has also suggested to embed a culture of risk management - from concept to commissioning, strengthening people management processes, augmentation of organizational skill set, deepening stakeholder management for land acquisition, regulatory approvals and establishment of a robust project governance structure.

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