Planning Commission deputy chairman Montek Singh Ahluwalia on Wednesday stressed the need for speedy resolutions on the issue of price pooling for domestic and imported fuel coal and gas for the fuel-starved power plants in India.
Under the pooling mechanism, the cheaper domestic coal as well as the gas prices are averaged out with expensive imported fuel to get a reasonable rate for the feed stock for power plants.
“In the next 3-4 years I do not see any way of resolving these issues unless high level decisions are taken. And both coal and gas (domestic and imported) prices have to be pooled,” Ahluwalia said at the India Energy Forum.
Alongside, he also stated that there is a need to put in place serious investment plan for the power sector. “We have to appreciate that the generation (of power) is increasingly led by the private sector. This investment has to be financed,” he said.
However, financing by banks in either generation or transmission needs to have viability of the operation on the basis of the quality of the entrepreneur on project management skills.
He also said the electricity regulation act is not properly implemented and large consumers of power should be encouraged to enter into purchase agreements.