They say “when the going gets tough, the tough get going.” But they never said in which direction. With the recent power cuts, exacerbated by heat waves and drought, it was certainly a tough period for India’s power minister Suresh Prabhu. The minister “got going” by tendering his resignation.
It seems a shame. Judging by our one meeting at Power-Gen India at the beginning of 2001, he seemed to be a likable man with the ability to make things happen in a country which has often talked a good strategy but failed to deliver. Yet it seems he was not making things happen soon enough. His party supremo was rumoured to be unhappy with Prabhu’s workings and said he wanted instant results. If true, this seems to be a trifle unfair. Certainly Prabhu was not given much time.
India’s power problems are deep-rooted and were never going to be solved in the two years or so that Prabhu had been in his position. But with reports of social disorder caused by the power situation, I guess the government had to be seen to be doing something.
India’s power crisis came to international attention at the beginning of July when New Delhi was hit by its worst power crisis for many years. Although two to three hours of power outages are common during the summer, power cuts of four to eight hours were reported. In some areas it stretched to fourteen. News of angry mobs blocking traffic and clashing with police followed.
The situation worsened when on July 31, the five states of Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh and Goa were plunged into darkness overnight in one of the biggest shutdowns in years. Power Grid officials claimed the blackout happened after Madhya Pradesh, which could not produce sufficient hydropower because of the drought, tried to draw more electricity than the grid could handle. Madhya Pradesh denied this allegation.
Certainly power grid failures are not uncommon in the summer months, a situation which Prabhu had been trying to address as part of his reform plans. He had introduced structural changes in policies – such as focussing on power distribution reforms. This had been prompted by the experience of the last ten years, which saw many investors coming in then quitting because transmission and distribution continued to be in government hands, thus creating insecurity about payment for the electricity generated.
Prabhu realised that transmission and distribution was as much a problem as the shortfall in installed capacity. Under the Eighth and Ninth Plans, capacity addition was less than half the target set – due to the fact that private sector participation did not materialise as envisaged. Under the Tenth Plan, Prabhu planned to hike public sector investment by 270 per cent to add 44 000 MW in the next five years and another 63 000 MW in the subsequent five years. And notably, the ongoing distribution reforms were expected to salvage 10 000 MW of this through reduced transmission and distribution losses. Further, the creation of a national grid could facilitate the evacuation of 5000 MW which is not available due to the isolated functioning of the five regional grids.
Although good on paper, it is questionable whether Prabhu’s plans were achievable. The Credit Rating Information Services of India Ltd (Crisil) stated that the capacity addition target would fall short at around 28-29 000 MW in the 2002-2007 period based on the present status of major public and private sector projects.
Certainly, the plans could not address the immediate problems or satisfy angry mobs. Accordingly, Prabhu had asked IPPs to re-start idle projects – a move which prompted rumours that the controversial Dabhol project might be also re-started. A new 500 kV transmission line, commissioned at the end of August, to bring power to the southern region would also help. This line should be transmitting 2000 MW by the end of the year. But for Prabhu’s party leader, it was too little, too late. With Power-Gen India coming up in January, I look forward to hearing first hand what would have been enough.
Whether Prabhu and his strategies were a big part of the problem or whether he was made a scapegoat remains to be seen. The rains may now have come but dams still leak – not unlike the flow of foreign investors continuing to exit the country.
In the meantime, India’s citizens will have to deal with the effects of the power shortages in their own way. There was one report of New Delhi local Mr Asmit Aggarwal, who spent many nights ‘up on the roof’ – not to seek inspiration from any song title, but simply to keep cool. While things may look different from up there, Mr Aggarwal knows its the same story. A new minister may come but there will still be no air conditioning. You will notice that PEi has also gone for a ‘new look’, but rest assured the story is the same. Much like India really.