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'British investment hinged on Indian power reforms'
Thursday, 05 August 2004, 19:30 IST
NEW DELHI: British investment in India's power sector is not likely for another few years till the reforms process underway starts showing results, a leading expert said here Wednesday.
"Things in India must change before you can encourage private investment into the power industry here," said Gordon Roberts, chairman of British Power International, during a meeting organised by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
The way it is at the moment, it is difficult to see any investment flow from Britain coming into India," Roberts said.
"But five years from now or even earlier depending on the changes the new electricity act brings, India could see investment flows," he said.
The current rate of transmission and distribution losses in the Indian power sector, which is around 50 percent in some regions, is a major deterrent for private and overseas investments, according to the British expert.
Here to share the British experience of power reforms since the privatisation in 1990, Roberts hoped that India would learn from the British experience and shorten the time taken to ensure better services to consumers.
Parvinder Kaur Dobb of Martineau Johnson, a British law firm representing power utilities, disclosed that there is tremendous investor interest in India.
"Several companies looking to trade emissions are looking at India for working in the renewable energy projects. India is seen as a favourable destination as it has already established the protocol for emission trading," said Dobb.
Power starved India, which is seeking to double generation capacity with the addition of 100,000 MW by 2012, embarked on wide ranging reforms with the help of state governments a few years back.
The passage of legislation in power sector last year was part of the initiative to promote investment in power generation, transmission and distribution sectors.
"The price of electricity from new generating units has been much lower than the older plants. The anticipated competition (with the entry of more private producers) is working to the benefit of consumers," said Ajay Shankar, additional secretary in the power ministry.
Looking after the reforms process, Shankar disclosed that efforts to curb power thefts and improve efficiency of the generation and transmission sectors as also better metering has led to tremendous benefits showing in just a few years.
"An additional 
60-70 billion has come into the system in the sector which has a turnover of 500 billion ($10.79 billion)," the official said.
"This will help generate about 10-11 percent more power through efficiency gains and competitive pressures that are likely to emerge," he said.
The result is state-owned power major National Thermal Power Corporation (NTPC) has been reporting 100 percent collection of its dues from the state power utilities.
Another clear evidence of the confidence generated by the reforms process underway was the investors' response to the shares of power companies, Shankar pointed out.
"The best performers in the Indian stock markets were the power stocks last year," he said.
Source: IANS
60-70 billion has come into the system in the sector which has a turnover of 500 billion ($10.79 billion)," the official said.
"This will help generate about 10-11 percent more power through efficiency gains and competitive pressures that are likely to emerge," he said.
The result is state-owned power major National Thermal Power Corporation (NTPC) has been reporting 100 percent collection of its dues from the state power utilities.
Another clear evidence of the confidence generated by the reforms process underway was the investors' response to the shares of power companies, Shankar pointed out.
"The best performers in the Indian stock markets were the power stocks last year," he said.
Source: IANS