Other indicators in the state's power sector have also contributed to a sense of insecurity among potential investors. Power transmission loss, the official said, had reached 5.22 per cent, much beyond a norm of 4 per cent.

Similarly, power distribution loss had gone up to 18 per cent, more than half of which was due to theft "byagriculturists and industrialists", he added. Power shortage remains a huge problem in the western state. Looking at the list of projects planned, the future would appear bright. But in the past five years, power production increased by only 1,200 megawatts (mw) against a rise in demand of more than 3,000mw due to rapid industrialisation.

Current demand is 6,700mw and the shortfall about 1,500mw. The Central Electricity Authority (CEA) says power consumption in Gujarat rises by 7 per cent every year while the Gujarat Power Corporation Ltd (GPCL) claims the annual increase is 9 per cent. According to the Tata Energy Research Institute (Teri), the state's total requirement would rise to 9,522mw by the end of 2002. Considering a peak availability factor at 73 per cent envisaged by Teri, by upgrading the current power plant technology the installed generating capacity should rise to 13,044mw.

It is against this background that projects envisaging 3,694mw production have either been approved or are in thepipeline. But even if the 21 proposed projects are completed, the state is expected to have a deficit of some 656mw. This however "could be met by private captive power generation," said an official. The massive 2,000mw gas-based project at Pipavav on the Saurashtra coast is still nowehere near taking off despite the central government's promise to release the required natural gas through a pipeline from southern Gujarat. Some 15 years have gone by in just planning and wrangling over the project.

The state government has not managed to go in for faster privatisation despite the Asian Development Bank's (ADB) $250-million loan installment (of a total of $1,000 million) for speedy implementation of power reforms. ADB's three main conditions are power sector restructuring, introduction of accounting and auditing at every level and an electricity charge of Rs 1.20 per unit on farmers. Gujarat politics -- especially since chief minister Keshubhai Patel has a strong farmer backing -- has created a situationwhen "such reforms become well nigh impossible," said economist MK Doshi.