Hyderabad, May 25 (IANS) The Indian government is taking steps to attract foreign direct investment (FDI) in the power sector, critical to the country’s economic growth, Power Minister Sushil Kumar Shinde said Tuesday.
He said despite making provisions for 100 per cent FDI in the power sector under the Electricity Act, 2003, there was not much response. Only two to three foreign investors came forward prior to his becoming minister.
But now the government had taken steps to help instil confidence in foreign investors and see the sector grow, he added.
The minister was speaking here at the signing of a joint venture agreement to set up a 1,320 MW power project at Krishnapatnam in Nellore district of Andhra Pradesh.
Singapore’s Sembcorp signed the agreement with Gayatri Projects, a Hyderabad-based infrastructure firm, to set up the super-critical thermal power plant.
Shinde noted that this was the first FDI since he took over as the power minister four-and-half years ago.
‘Two months ago they (Sembcorp) met and I assured them of all support. I was little doubtful whether this agreement would come through because many people come, inquire and go away,’ he said.
Shinde said the government paid Rs.10,000 crore to Enron though the commitment was made by the previous National Democratic Alliance government.
Prime Minister Manmohan Singh decided to fulfil the commitment as he did not want India’s image to suffer. ‘Today Ratnagiri plant (as Enron project is now called) is producing 1,900 MW of power,’ he said.
Shinde said though 42,000 MW of power generation was targeted during the 10th plan, only 21,000 MW could be achieved.
He claimed that the ministry was on course to achieve the 78,700 MW target for the 12th plan and listed steps like enhancing the capacity of Bharat Heavy Electricals Limited (BHEL).
Shinde said India needed bigger generation capacity as it was aiming to achieve 1,000 units per capita consumption by 2012. At present, the country’s per capita power consumption is 700-800 units.
Andhra Pradesh Chief Minister K. Rosaiah urged the union minister to speed up the clearances for the power projects in the state. He said the state was uniquely positioned to emerge as a power hub as it has abundant coal and natural gas reserves.
The state also has Uranium reserves and the Uranium Corporation of India Limited has selected Thummallapalli in Kadapa district and Lampapur-Peddagattu in Nalgonda district for mining uranium.