Sucheta Dalal :Man made power crisis? (3 June 2002)
Sucheta Dalal

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Man made power crisis? (3 June 2002)  

Maharashtra is paying the price for its continuous meddling with the power sector ever since it began negotiating with Enron in 1994. Ironically enough, the present power crisis caused due to repairs and maintenance is again being used as an excuse to restart purchase of power from the Dabhol Power Company’s 740 MW first phase. Incidentally, Sharad Pawar negotiated this when he was Maharashtra’s chief minister and later cancelled. The government is again using the current shutdown to paint a picture of massive power shortages. This, after it had hounded Maharashtra State Electricity Board’s former chairman Vinay Bansal for trying to improve efficiency. The no-nonsense Bansal finally sought a transfer and the post was kept vacant for several weeks after his exit. So what is the real truth about Maharashtra’s power situation? Are shortages deliberately exaggerated? Why is a shutdown for repairs being confused with power shortages? And if there is a genuine deficit, can we rely on a set of politicians who have saddled us with Enron’s white elephant to give us the accurate picture? Also, while the government says that the power problems will be sorted out by June 3, why are its babus hinting darkly at the possibility of the power cuts extending until June 15.

Another crisis

Even as industry associations have stepped up the pressure for long terms solutions to Maharashtra’s power problems, an equally big problem looms in neighbouring Gujarat. Apart from violence on the streets, the State is reeling from massive power cuts as 26 power plants have been shut down at the height of summer, either for repairs and annual maintenance or fuel shortage due to a leak in the Gandhar supply line. Consumers in Gujarat have filed a petition against the Gujarat Electricity Board before the Gujarat Electricity Regulatory Commission alleging unplanned, inefficient and uneconomical operations leading to a power shortage. The petition filed by the Consumer Education and Research Centre has asked the Commission to appoint an independent committee to investigate the ‘manmade’ power crisis in the State.

Impossible to exit

Consumers usually complain about boorish verification procedures of credit card companies, but Mahesh Wagle of Pune is having problems getting rid of his American Express card. Amex, he complains, always sent its bills late (processed and mailed from Australia) and then had the nasty habit of charging late payment fees to cardholders. After seeking an explanation from Amex and getting no reply, he tried to cancel the card. That involved calling several Sheetals, Sonias and Ossies at Amex to no avail. Six months later, he continues to receive statements, complete with late fee charges and also renewal fees if you please! Letters remain unanswered and calls end up routed to synthetic taped voices. But Amex is not the only one. Hong Kong Bank’s card customers also find it impossible to hear ever find human voice at the end of long phone directions. If you go to the website, you are simply advised to call the telephone helpline taking you right back to square one.

FERA overdrive

Everybody knows that the Enforcement Directorate, notorious for its slow investigations, has been working furiously all through the month to catch the May 31, 2002 deadline for filing prosecution under the draconian rules of the Foreign Exchange Regulation Act (Fera). Its deadline-beating prosecutions include cases filed against a set of foreign institutional investors in the Shankar Sharma case and DSQ Software. More importantly, it has also filed prosecution against Indian Hotels and its former chairman Ajit Kerkar. Who are they? While on Indian Hotels, the ED’s prosecution of Ajit Kerkar for Fera violation could turn embarrassing for Disinvestment Minister Arun Shourie. Kerkar, it may be recalled, had cobbled together funds from several banks to acquire Centaur Hotels’ Juhu unit through Tulip Hotels—that too after a lot of huffing and puffing. While on the subject of divestment, investors wonder why big hotel chains don’t seem to bid or to bag the clutch of hotels being sold by Shourie. In fact, the fire sale of ITDC and Ashoka hotels reminds people of the opening up of the aviation industry and private banks, where a motley bunch including a poultry farmer and dubious underworld type bagged licenses while large industrialists were kept out. Shourie would be well advised to tighten his shareholders’ agreement, so that the hotels too are not stripped off their assets and resold in a state of further sickness

-- Sucheta Dalal