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• It can happen only in India. The sector has seen maximum reforms since the passage of the excellent Electricity Act 2003- unbundling of utilities, beginning of limited 'open access' policy, a regulator for every state, reasonable depoliticization of pricing, losses of state electricity boards ( SEBs) taken over through RBI guaranteed bonds, and unprecedented finance pumped in. Yet the power sector is in a comprehensive mess today.It all started with an excellent Act being castrated by our political leadership by repeatedly placing lapdogs as regulators, who toed their master's voices faithfully. Now giving free power to bribe the voters is a mere first step. On top of that there are promises of zero tariff revision for five years; guarantees that power thieves will never be caught, and encouraged if possible.
• And to make matters worse, several impediments are put in the way of the private sector when it wants to invest in the sector. Independently, the private sector tries every trick in the book to ensure that they do not have any financial obligation, even for any legitimate business risk that they might have taken, but instead pass it all on to the taxpayer, you and me!There is zero courage in governments irrespective of political hue, to ensure that free power in all its attendant avatars, is not repeatedly used by the political leadership to maul the treasury. The rare exception being Gujarat, which is a role model in ensuring 24x7 three-phase power supply to 18,000 villages, with investors now moving to villages from cities for their new projects!
• The 'real' SEB losses are around twice the 'official' losses being projected of around Rs 100, 000 crore and in many states banks have stopped lending to them. The 'real' losses can't be disclosed for that would take down the banking system along with the power sector! As such they are happy enforcing power cuts than buy more expensive power, coming out of the above-convoluted mess.In 2010-11 in just six months alone, NTPC 'lost' 8 billion units of power. Having power and yet unable to use it is criminal! The immediate crises looming is that of an acute, unprecedented shortage of coal to fuel India's power plants, with many of them having barely a few weeks supply of coal! The shortfall for existing and future power plants coming up until 2015 is approximately 150MT (million tonne) and the maximum amount covered via imports is about 65MT.
• Design and construction of the boilers of plants coming up till 2015 is already done, assuming provisioning for 10% imported coal, so it would be impossible to increase that now. Coal India's track record of just 347MT for power this year, and insistence on e-auctions, hardly ensures confidence on their promise of delivering 477MT by 2016.Private power firms are wrong in law when they cite force majeure based on change in law in Indonesia - which now does not permit coal to be sold below global prices- as a reason to ask for pass through of the higher prices to customers. In other words, while they reap the benefit by booking higher profits abroad in their coal companies, they want to sell that same coal to Indian customers and make a double profit by exploiting this direct conflict of interest!

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