Subhas Chandra Pattanayak

“Although Odisha is the first state to go for power sector reforms and is the only state where both transmission and distribution of electricity are privatized, yet, the achievements of the state availing uniform and qualitative power sector for a common man is not significant”, observes the Orissa Legislative Assembly Standing Committee formed to oversee the Department of Energy.

But it seems the House Committee is not aware of how the reform programme has been sabotaged.

In my column in Orissa’s mainstream broadsheet ‘Sambad’ I had exposed how payola had played a propellant role in Biju Patnaik’s decision to privatize power sector of Orissa, with specific stress on shenanigans involving AES and the foreign pack of advisors. In post Biju era, I had also exposed the rampant corruption, a part of which was being played by one Mahendra Kumar, the then Director, Commerce. Following the exposure, Mahendra Kumar had to go, but the anti-people activities of the new set-up went on, sufficiently as was being greased the relevant joints in the State secretariat.

Mr. Bishnu Das, Chairman of the Committee has not hesitated to transmit to the public that the Government should realize the futility of privatization and get rid of the private Distribution Companies (DISCOMs) in order to ward off anarchy in power sector. This idea may not stand the test on the matrix of Electricity Act, 2003. But there is no problem for the Standing Committee to probe and for the Government to act in the matter of loss caused to the State by way of subterfuge following privatization.

On 3rd of this month, AES has signed an MoU with Government of Chhatisgarh for setting up of a coal fired 1000 MW Project with an investment of Rs.5400 crores through AES India Pvt. Ltd. on Build, Own and Operate (BOO) basis. Upon operation, the proposed plant of AES will work as a Merchant Plant and would supply power to the power deficit States of the country.

In the light of observations of an astute power engineer, this is a death blow to Govt. of Orissa.

AES India holds 49% share in Ib Thermal Power Station of Orissa Power Generation Corporation along with management control since January 1999. It had earlier agreed to undertake installation of Unit-3 and 4 of ITPS at an estimated cost of Rs.1706 crore. By performing ‘Bhumi Puja’ for the purpose on 23rd August, 2004 at the request of AES India Chief Minister Naveen Patnaik tried to renew its credibility. Had he shown equal zeal for recovery of the dues claimed against AES, the GRIDCO could have gained a sum of Rs.645 crores. It is worth noting that AES India has already reaped the Dividend amount of Rs.449.22 crores by the FY 2004-05 from ITPS, whereas purchasing 51% of CESCO in September 1999, it had fled away on 27.08.2001, in the process, cheating GRIDCO of Rs.645 crores against which the later has lodged a claim on 08.02.2003. It is sad that the State Government does not show appropriate interest to defeat AES mischief.

This Company had earlier signed an M.O.U. with Govt. of Orissa and OSEB in 1992 for installation of 2×250 MW Thermal Plant at Ib Thermal Power Station. It has obtained all statutory clearances under First Track Power Project Scheme and concluded amended PPA with GRIDCO as successor to OSEB on 31.03.1997 for an investment of Rs.2369 crores. But this project has deliberately been kept dormant.

Look at it from any angle as you like, it would transpire that AES India is playing hide and seek with the people of Orissa. In such a situation a responsible and alert Government should have taken over the 49% share of OPGC from AES and should have assigned the Project to other developers showing Expression of Interest (EOI). But, by conducting ‘Bhumi Puja’, Chief Minister Naveen Patnaik has indicated that he can side with fraudulent players, happen what may to the simple people of Orissa.

The Standing Committee has legitimate scope to read this mischief. Let us hope against hope that it acts.

However, AES India is not by itself the entirety of the fraud that has affected Orissa’s power sector. A section of IAS officers and their cronies in sensitive places of administration have forced Orissa into a condition of recurring loss, in order only keep alive a scope for AES to benefit from power crisis. Let us go to the point.

In 1997, NTPC requested GRIDCO to avail 700 MW power at the rate of 35% of 2000 MW from their Talcher Super Thermal Power Project Stage-II (TSTPS Stage-II) at Kaniha near Talcher.

Senior IAS officer M.Y.Rao was then the CMD of GRIDCO. He constituted a committee comprising the aforesaid Mahendra Kumar, the then Director (Commercial), Sri Rama Ballav Mishra, the then Director (Finance) and Sri B.C. Jena, the then Director (Transmission and Distribution) of GRIDCO, who is presently a Member of Orissa Electricity Regulatory Commission, to decide whether GRIDCO should avail this Power.

This Committee decided not to avail the 700 MW power offered by NTPC under the plea that the exact Tariff and exact Schedule date of completion of NTPC Units were not available.

Whether the plea was cooked up keeping in mind the interest of Private Developers like AES and KPCL etc. or not can be ascertained by a body like the Standing Committee of the Assembly.

But, it needs no specialization to understand that the above recommendation of the Committee debarred Orissa from gaining from the NTPC offer.

As the recommendation was adopted by Rao, GRIDCO had to intimate NTPC that it was not to avail 700 MW Power from TSTPS Stage-II. Consequent upon this, NTPC allotted this 35% (700 MW) power to Southern Region constituents like Andhra, Tamilnadu, Karnatak etc.on the premise of Infirm power at the rate of 50 Paisa/KWh and Commercial power at the rate of 160 P/KWh.

Date wise all the four Units of TSTPS Stage-II beginning from Unit-III entered into commercial operation with effect from 01 Aug 2003, 01 March 2004, 01 November 2004 and 01 Aug.2005 respectively.

It means, due to the suicidal recommendation of the Committee, Orissa lost procurement of power to the tune of 2453 MU (500 MW x 0.8 x 0.35 x 8.76 x 2) during 2003-05 at the cost of 50 P/KWh. If it would have traded the same infirm power, it would have done so at a prevailing market rate of 250 P/KWh. Money wise, it would have given a gain worth Rs.490 Crores to GRIDCO. Similarly, after commercial operation, Orissa would have gained 300 Paise on each Unit (Trading value 460 P/Unit / Cost of generation 160 P./Unit).

A mere mathematical calculation (700×0.8×8.76×3) suffices to say that the financial loss to Orissa on account of the recommendation of the Committee constituted by Rao and the cold calculated decision by the two IAS officers at the helm of affairs, one at GRIDCO and the other in the department of energy in Orissa’s Secretariat rejecting the offer of NTPC is not less than Rs.1470 Crores per annum.

The loss to our State is not limited to the above evidence. The lackadaisical manner in which the State is now run has been playing havoc with the power sector.

It is the policy of Govt. of India that the home State should get 12% free Hydel power from the Projects undertaken by Central Government Power Companies like NHPC, NEEPCO etc. Similarly, 10% of thermal power is given as home State quota from all NTPC Stations located in that State.

Orissa is in such hands that the Government is not demanding or claiming the legitimate share of 10% of generated power as Home State Quota from TSTPS Stage-II which is located in Orissa and thereby is loosing Rs.420 Crores over 200 MW annually (calculated at 200×0.8×8.76×3) considering the prevalent trading price of 460 P/Unit.

Standing Committee of the Assembly could not see this scenario.

But it would be somewhat rectifying the mistake if the Assembly, while taking up energy budget, pays attention to the precarious position of power that is now menacingly threatening Orissa.

Although endowed with 23% of the Country’s power grade coal and 10% of annual surface water flow, Orissa will fall far short of the minimum requirement of power in 2007. I have already shown reasons to say that it portends a power-famine from the year 2009 onwards.

If the Assembly can compel the Government to constitute a Task Force in the pattern of War Council functioning during war time to go for and start immediately 3 to 4 Super and Mega Thermal Power Projects and at least one Ultra Mega Thermal Project (4000 MW), the dark days could be avoided.

But can it? Are there enough members in the treasury bench to drag out their Government from its bureaucratic cocoon into the world of activities, in interest of the people?

I leave the answer to whosoever watches the Assembly when energy demand is taken up.