At a time when the poor health of electricity distribution firms is raising concerns, NTPC chief Arup Roy Choudhury on Friday said the problems with state electricity boards are more “political and social” in nature.
Talking about the power sector, NTPC chairman and managing director Arup Roy Choudhury said that there is a wrong perception that electricity is free. “There is a wrong feeling, especially now that this is election time, that probably power is free. Power has an economic cost. About 75% of the power tariff is the cost of fuel...,” Roy said here during a panel discussion at the India Economic Conclave.
Noting that problems with state electricity boards are different, he said it is “more of a political and social problem”.
State-owned NTPC is the country’s largest power producer and has an installed generation capacity of over 41,700 MW. The accumulated losses of state power distribution firms were estimated to be around R2.46 lakh crore as on March 31, 2012.
Planning Commission deputy chairman Montek Singh Ahluwalia said that if the politics of the country does not lead to a sensible distribution policy, all investments in the power sector would be infructuous since money is collected by the power distribution companies.
Stressing that “good sense is beginning to dawn”, he said that in recent times several states have increased electricity tariffs. Jindal Steel and Power (JSPL) MD and CEO Ravi Uppal highlighted issues faced by private power producers.
“I can’t think of any private power projects that are taking off now because the private sector today is in an atmosphere of uncertainty, unpredictability,” he said during the panel discussion on ‘Breaking the Infrastructure Jinx’.