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NEWS NOTES
Cost of Central Sector Power in Eastern Region Hiked by 40%

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Observations in Bengal

by Staff Correspondent

Government of India unilaterally revised the tariff of National Thermal Power Corporation (NTPC) Power Situations in Eastern Region, which would adversely affect the financial position of the State Electricity Boards as well as the industrialisation in the States of eastern region. As per notifications in November/December '98, the fixed charges of Farakka, Kahelgaon and Talcher Thermal Power Plants of NTPC have been increased by about 40% with retrospective effect. The cost of Central Sector power, which was about Rs. 2.06 per unit average in September '98, has now become Rs. 2.83 per unit from November '98 onwards. This has come as a big blow to the prospects of future industries in this Region apart from the added liabilities thrust on State sector Power Agencies in the Region.

Inspite of serious objection raised by the Government of West Bengal in a meeting convened by secretary (Power), Government of India on 13.01.99 at arbitrary decision against the interests of the States. Apart from West Bengal, the Gride Corporation of Orissa Limited of Orissa government has also taken a strong exception to this step and has approached Central Electricity Regulatory Comission (CERC) for intervention.

Interestingly, CERC was formed through promulgation of an Ordinance by government of India, which was in a great ratified in Parliament in June '98. One of the major mandate vested with CERC is to regulate the tariff of generating companies owned and controlled by Central Government. However, for the revision of NTPC power tariff, Government did not approach CERC at all and by an administrative fiat preferred to go for the hike.

The obvious purpose is to satisfy the World Bank conditionalities to ensure that the receivables of NTPC goes up to the maximum extent possible before CERC is allowed to regulate the tariff of Central Power Agencies. Eastern Region in the process is being subjected to a gross economic injustice as its Power Stations are being asked to buy power at such an exhorbitant rate from NTPC whereas surplus power from Eastern Region is being sold to other Regions at a lower tariff to suit the political game plan of the Ruling Party at the Centre.





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