Subsidy for Northeast power projects being revised

Funding structure for power projects in the Northeast is being re-worked with aims of attracting investments, reports Srinand Jha.

india Updated: Jan 23, 2007 01:24 IST

Funding structure for power projects in the Northeast is being re-worked with aims of attracting investments by providing for an elimination of the anomalies that exist in the present arrangement - which does not offer a higher category of subsidies for projects conceptualised in difficult geographical terrain.

Of critical importance is the need to provide for higher subsidies for projects envisaged at remote locations (instead of a uniform rate of subsidies as at present), feels Department of North Eastern Region (DONER) minister Mani Shankar Aiyer. The region's potential for hydropower generation has been identified at 2000 MW.

Within six weeks, an inter-departmental sub-group expected to submit recommendations on the specific problems afflicting implementation of new and renewable energy schemes in Arunachal Pradesh, while three other sub-groups have been established: The first of these to address transmission, sub-transmission and distribution related issues. Another sub-group is tackling the task of identifying and examining roadblocks in the implementation of rural electrification schemes. Based on inputs from these groups - incorporating elements to provide for an appropriate funding mechanism -a master plan for power development in the region will be developed.

"What is actually needed is a clear, coherent and consistent policy for enabling actualisation of the aim of the emergence of the region as a "powerhouse" of the country, Aiyer said at a press conference. "Power to the people" is the goal, said the Minister - while adding that the region's growing and diversified demands for power needed to be fully met for furthering its economic advancement.

Besides providing for a viability gap funding for SHP projects, the new policy is expected to provide for a mechanism for the involvement of elected representatives of the local communities like Panchayati Raj institutions for the repair and maintenance of these projects.

Among the region's eight states, Arunachal has the highest potential for power generation from Small Hydro Power (SHP) projects, but the implementation path has also been the most problematic in the state. Of the 492 SHP projects identified for the state, as many as 380 are pending. Only 64 having been executed, while 48 are under construction.

Briefing newsmen after the North Eastern Council's first sectoral meeting on the power sector at Pasighat in Arunachal earlier this month, Aiyer said that plugging transmission and distribution losses - amounting to three-fourths of the power generated by some estimates - was another huge challenge. He said he was pursuing the idea of a centrally sponsored scheme to support inter-state and intra-state transmission and sub-transmission projects.

In striking contrast to the addition of 25,000 MW to generating capacity in the rest of the country during the tenth plan (involving investments of Rs 60,000 crore), just about 125 MW was added in the Northeastern region. These unfortunate circumstances, according to the Minister, were caused because of the absence of an "enlightened, overall and long term vision" for the region's power sector. With reforms now being initiated, he expects the region to at least double its power generation capacity during the 11th plan.

First Published: Jan 23, 2007 01:24 IST