World Energy Outlook 2007

Box 15.3: Public-Private Partnerships
Public-private partnerships are designed to provide public services more
efficiently and at a lower cost to the end user than either the government or
the private sector could provide on their own. 14 In India, both the central
government and the states intend to use public-private partnerships more
intensively to help meet gaps in the provision of energy services. India has
run fiscal deficits for decades and, increasingly, there are limitations on how
much the public sector can spend. Public-private partnerships could play a
key role in meeting investment needs over the Outlook period in the context
of a transparent and stable business environment. One role for the
government in these partnerships is to reduce start-up hurdles, such as
delays in acquiring land and construction permits. This would lower
investor risk.
Private-sector investment will be crucial for the rehabilitation of existing
power plants and for other needed investments in transmission and
generation. Powerlinks Transmission, a joint-venture between the private
utility Tata Power Company and the state-owned Power Grid Corp, is the
first public-private partnership in power transmission in India. Powerlinks
is a $265 million project to build, own, operate and transfer five 400-kV
lines and one 220-kV transmission line extending over 1 200 km from West
Bengal to Delhi, with a capacity of about 3 000 MW. The system became
operational in early 2007. It brings power from the Tala hydro plant in
Bhutan to the north of India. Power Grid managed the consent and
approval processes involved with laying the lines, but Powerlinks will
maintain them.
Energy Access
While economic growth has reduced poverty levels in India, we estimate that
there are still some 412 million people without access to electricity. The
number of people in India relying on fuelwood, dung and agricultural residues
for cooking is estimated to be about 668 million. The heavy dependence on
these fuels for cooking has serious consequences for health: women and
children are the most vulnerable. These issues are taken up in greater detail in
Chapter 20.
15
Environment
India faces serious energy-related environmental damage. Congestion and
pollution from motor vehicles is an increasing threat to health in all Indian cities.
Over half of Indian cities have levels of particulate matter (PM 10
) which are more
14. See OECD (2007) for guidelines for public-private partnerships.
Chapter 15 - Overview of the Energy Sector 461