Ashok Dhillon, Chairman & CEO, Canasia Power Corporation
You have been in India since 1993 and were selected by the Uttar Pradesh government for the Jawaharpur project. How has been your experience in dealing with government agencies in India? Do you see procedural bottlenecks?
Our experience in the early years of development, 1993 to 1996, was positive. But then, with the debacle of Enron-sponsored Dabhol Power Plant, the deep financial non-viability of the state utilities with whom major power projects had had to sign PPAs, and the inability of Coal India Ltd to sign and provide bankable fuel supply agreements, led to the lost decade of wasted effort and investment in the power sector in India.
The reform and restructuring of the power sector, undertaken by the Electricity Act 2003, to a degree, addresses some of the bottlenecks that have hampered power development. The 'open-access' concept and the dedication of coal blocks to major projects, being two of the main initiatives that are addressing the two major bottlenecks of the past. But the effective implementation of these key elements is still governed by the public sector and therefore there is still a large element of inefficiencies, where developers are dependent on government agencies to do the right thing. This does not always necessarily happen. This unfortunately will carry on for some more time, while an entrenched system tries to correct itself.
How can India expedite private investment in the power sector?
We need greater autonomy for the private sector to be able to deliver the type of services required by modern India, in the power sector. This would require greater accountability from the public sector, less political interference for short-term political gain and a real sense of partnership between the public and private sectors, which can then work together for the country's good, rather than solely working for the self-interest of the service provider, at the cost of terrible disservice to the public and the country.
The single biggest deterrent to accelerated development of the power sector and greater effective participation of the private sector is the hemorrhaging of funds at all levels of the current power sector, but particularly at the distribution level. If costs cannot be recovered and secure and steady returns on investment capital cannot be counted on, whether in the public or private power sector, then neither the government has enough money nor the private sector is going to be able to invest enough to build the size and scope of infrastructure needed to make India a properly functioning country, where more times than not, the lights are actually on. So the governments need to focus more sharply and take firmer measures to stem the unacceptable losses in the power sector, particularly at the distribution level, and bring greater accountability to the sector.
Talking of Canasia's Jawaharpur power plant, what is the broad status of land acquisition?
The power plant site is located at Jawaharpur near the village of Kamsan in the district of Etah, Uttar Pradesh. We have completed a detailed survey of the site, and filed and received approval for rehabilitation and resettlement plan by the appropriate government agencies. We have undertaken preliminary soil and water tests, compiled a complete list of owners of the land and filed these lists with the appropriate district magistrates' offices. With letters of approval from village authorities for land acquisition in place, we plan to initiate the land acquisition process in the coming months.
What is the status of mandatory environmental clearances?
The Jawaharpur super thermal power project has received all mandatory and statutory clearances, including the pollution board, and MoEF clearance for its original configuration of 2x400 mw. Canasia is upgrading its clearances, including environmental clearance for the 2x660 mw supercritical configuration. As the performance of the supercritical units is superior to the sub-critical original, including the environmental aspects, we do no anticipate any undue delays.
What influenced the decision to revise the project configuration from 2x400 mw to 2x660 mw?
The primary factors driving the decision to change the configuration have been, the time that has lapsed since the project was first developed, and since that time, over a decade ago, 1. The power situation has further deteriorated in the state and the country, and 2. The environmental concerns nationally and globally have heightened.
Being Canadian and perhaps being more sensitive to environmental issues and being responsible corporate citizens, we want to do the best for the state, the country, and the global environment. Therefore, to address the greater need for power now, in UP and in India, we have increased the size of the plant from the original 800 mw to 1,320 mw. Moreover, to address the Indian and global need for greater mitigation of environmental impact from critically needed projects such as these, we have decided to incorporate the latest clean coal technologies and methodologies available, to maximise resource utilisation and environmental impact mitigation, and thereby be amongst the leading edge of responsible developers.
You have placed the EPC order for Jawaharpur STPP on China National Electric Equipment Corporation. What were your main reasons to decide on Chinese suppliers?
The primary reasons for most power developers in India choosing the Chinese suppliers are: price, delivery dates, availability of preferred technology and building experience. In today's environment the Chinese suppliers and EPC contractors are hard to beat, considering all the factors listed above.
We shall be receiving estimated costs of the new power plant, through our chosen EPC contractor by September 2008. We expect to achieve financial closure within nine months from then.
What about the coal supplies?
We are actively pursuing the three options available to private power developers today: 1. Reinstatement of previously granted coal linkage to the Jawaharpur STPP. 2. Allocation of dedicated, appropriate coal block for Jawaharpur STPP. 3. The possibility of importing coal for the Jawaharpur STPP.
Our preference is the allocation of a dedicated coal block. We are pursuing Coal India Ltd, state and Central government for such an allocation to be determined in the project's favour.
When do you expect the Jawaharpur TPP to begin operations?
On everything going as planned, the 1,320-mw Jawaharpur STPP will be producing power in 2012. We plan to sell as much power as the state (Uttar Pradesh) can purchase comfortably. As for the rest, in consultation with the state, we shall deliver power on long-term basis to nearby creditworthy buyers such as PTC India.
Are there are plans to expand the 2x660 mw project in future?
The current design and layout of the Jawaharpur STPP anticipates a third unit of 660 mw, for a total of 1,980 mw.
Is Canasia contemplating more power projects in India?
Canasia persevered through the last, difficult and generation-wise, unproductive 10 years, when most foreign developers who had entered India in the early 1990s, left. We stayed because we believed in the potential of India and wanted to be a part of the vital development of the country towards modernisation. Yes, we plan to be very active participants in the power sector, in the building of electrical infrastructure required, beyond the Jawaharpur STPP.
Source: Projectmonitor, August 4-10, 2008 |