Making this point in a Indo-American Chamber seminar on `Empowering India' here, Mangalore Power Company managing director Ron Somers argued that delays in approval for the 1000mw project in Mangalore has to be reckoned against opportunity cost viz loss of power generation sorely needed by Karnataka government and scores of highly educated and talented engineers and technicians who could be working in the power sector migrating to other parts of the country or going overseas.

Somers attributed delays to the constant changing and chopping of announced policy which lead to confusion and uncertainties. There is nothing like perfection in policy and if this is the aim it will lead to lack of progress.Since 1992 Somers said less than 3000 mw have been generated of the originally envisaged 80,000 mw during the Eighth Plan period.

"Confidence building measures are the need of the hour. A good power purchase agreement (PPA) sends strong positive signals. The counter guarantee must not be changed at the last minute," he appealed.

The Mangalore power project has taken three years to achieve a good PPA and even now they are talking of reopening the A for the fourth time. Somers says a consensus approach is needed to meet the shortages of power vital for moving wheels of industry and creating jobs.

Managing director of PSEG India Inc. B Vanchi in his presentation on "Private Power - India Scenario" pointed out that long development cycles in power projects were a dampner for fresh foreign investments in the power sector. "There is very high hurdle rate" for financial investors coming into India, he said giving example of bottlenecks in domestic coal transportation for want of wagons from the Railways andlack of coordination between various agencies.

Vanchi said PSEG is trying to float joint ventures with PSUs and TNEB in Tamil Nadu to overcome the lack of commitment on the part of government agencies to move faster. By offering them the option of 11 to 26 per cent stake to promote a project in the joint sector, PSEG hopes to propel them into action for faster implementation of projects.

But several key issues need to be tackled. Among them he listed as priority the need for rationalisation of tariff without which investors will fight shy of entering the power sector, simplification of permitting process ensuring transparency, resolving fuel supply issues and reduction in transmission and distribution losses.

TNEB director of projects C Chandramouli stoutly defended the careful analysis of projects by the state government and said TNEB was moving to restructuring and reforms and modalities are being worked out. Mandatory audit and policy of cutting down transmission and distribution losses to 15 percent in a year have been initiated.

On the escrow issue, Chandramouli argued that the TNEB had applied uniform norms for all projects. TNEB has been producing power for a century but no one had asked for escrow. Also no power plants have failed on account of non-supply of coal. TNEB has not defaulted on payments to Coal India Ltd or NTPC. He pleaded for a creative solution to the problems faced in private power generation and said US investors were not worried about escrow, state government guarantee, Government of India counter guarantee. What they are looking forward is for restructuring and reforms in state electricity boards so that they can have a healthy bottom line.

He said documents which are unfair may have to be renegotiated. And IPPs should not complain about this. Also FIs have given their nod to eight projects in Tamil Nadu.