AIPEF opposed to leasing out thermal and hydro power stations in state sector

07/22/2012

The All India Power Engineers Federation is vehemently opposed to the proposal of leasing out old and depreciated thermal and hydro power stations for renovation and modernization to private sector players by state governments.

According to the representative body of degree holding engineers in the government power sector, renovation and modernization of the thermal and hydro power generating units that have completed their designed useful life should be carried out by the respective state utility to ensure benefit for consumers.

Of late, the AIPEF claims, private sector players in various states including Haryana and Maharashtra have been attempting to get in to power generation by seeking lease of old and depreciated thermal and hydro power generating units that belong to state gencos for renovation and modernization. The engineers' body point out that handing over the old and depreciated units to private sector for renovation and modernization would burden state gencos and distribution utilities with higher cost of power. The private sector players, on the other hand, would reap huge profits through sale of power from the renovated assets by making minimum capital investment. For thermal and hydro power stations that have operated for their designed useful life, renovation and modernization is considered the most suitable route. With necessary infrastructure already in place and only worn out equipment requiring replacement, the capital expenditure for new capacity addition can be kept to minimum.

During the federal executive meeting of AIPEF held recently at Bilaspur in Chhattisgarh, a resolution was passed against leasing out of old and depreciated thermal and hydro power stations in state sector to private companies. Resolutions were also passed in favor of setting up a high level committee of experts by the Centre to review reforms in the power sector in the last two decades, constitution of a committee by the Centre to conduct inquiry into the working of Reliance Infra/ Reliance Power Group, professional management in the power sector and opposition to introduction of the distribution franchisee model in urban areas