Report of Indian Institute of Public Administration ... - Ministry of Power

Orissa
(xxiv) Substantial progress has been achieved in conceptualisation and formulation of
strategic business plan for capacity addition through setting up of two more units
of 250 MW each.
(Disputes between OPGC and the State Government about the sale of power
are holding up further developments.)
Stabilisation of Hydro power generation
(xxv) As part of creating additional generation capacity and also to increase its
profitability the following measures have been taken up by OHPC:
• Completion of Upper Indravati Hydro Electric Project (Capacity 600 MW);
• Renovation and Modernisation of Units-I and II, III and IV of Burla (40
MW); and
• Started construction of Balimela Extension Project (which would provide
peak capacity of 150 MW).
(In drought years OHPC is allowed to charge fixed costs in spite of
generation shortfalls. Therefore the OERC does not allow peaking tariff in
surplus years.)
(xxvi) OHPC has recorded highest generation 6868 MU during 2004-05.
(OHPC continues to remain dependent on the monsoon, particularly in
respect of the hydro-stations located in south Orissa.)
(xxvii) OHPC has made a profit of Rs 64.08 crore during 2004-05.
Lastly, some of the issues emanating from privatisation experience, which are areas of
concern, are mentioned below:
Issues and Concerns Regarding Privatisation
(i) The Shareholders’ Agreement between the BSES limited (now taken over by
Reliance Energy Limited) and GRIDCO expired in March 2004. Despite
persistent reminders by GRIDCO and the State Government, Reliance Energy
Ltd has not come forward to extend the Shareholders’ Agreement beyond March
2004. One of the clauses in the Shareholders’ Agreement provided that the
investor should endeavour to obtain further finances to meet the financial
requirements of the DISCOMs. Due to non-signing of the Shareholders’
Agreement, there is no obligation on the part of the shareholders namely
Reliance Energy Ltd. to bring in additional finance to support the distribution
companies under its management.
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