Delhi Industrial Estates Powered Out and Additional Power Targets in 32,000-Megawatt Jeopardy

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Industrial and commercial enterprises in India's Delhi capital region are under the threat of closure due to major and chronic power cuts and voltage fluctuations, according to the Associated Chambers of Commerce and Industry (ASSOCHAM), with production facing a fall of 60%.

ASSOCHAM said that industrial units in Ghaziabad, Noida, Gurgaon, Faridabad and Greater Noida have been particularly hard-hit and have lost 50% of their planned production in the past two months. If this trend does not stop, industrial units will lose their production to an extent of 60%, ASSOCHAM said.

ASSOCHAM has proposed a centralized power authority to bring uniformity in power supply and tariffs. D.S. Rawat, the general secretary, said that the frequent power shortages will severely impact the competitiveness of small and medium enterprises (SMEs) and that there was an urgent need to strengthen existing power distribution infrastructure in the industrial estate.

Looking past current power supply problems to the future also presents problems. More than 32,000 megawatts (MW) of planned coal-fired thermal power generation capacity, representing almost 50% of the targeted additions in the 12th Plan period (2012-17), has been shelved (17,195 MW) or put on hold (14,990 MW) by project developers.

Projects have missed construction schedule milestones and have experienced acute problems with coal supplies. Financial closure on projects has become very problematical, and a number of projects have been abandoned. The negatives surrounding thermal power project development have caused investors, who had been enthusiastic for the sector's prospects, to stand back and switch off the funding tap.

Other obstacles in the way of new project development are the Environmental Ministry's new ruling that requires developers to submit details about the quality of coal to be used in a project. This has had a negative effect on possible imported coal deals, in addition to the unpredictability of local supply.

For related information, see June 20, 2012, article - Coal India Limited Cuts Supplies to 60 Power Plants.

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