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<div class='ite_mg_banner ads__container'><div class='it_mg_bnrBox'><div class='ite_bnr_cont'><div class='ite_cont_dtl'> <h4>Get <span class='bold_text'>37%</span> off on an annual Print +Digital subscription of India Today Magazine</h4><a href='https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fsubscriptions.intoday.in%2Findiatoday%3Futm_source%3Dtop-web-banner ' class='ite_subscribe_btn origin_conscent_url' target='_blank'>SUBSCRIBE</a></div></div></div></div>

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<div class="itg-mosimage"><amp-img src="https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fakm-img-a-in.tosshub.com%2Fsites%2Fmedia2%2Findiatoday%2Fimages%2Fstories%2F1998January%2Fpower1_090412023239.jpg" alt="" height="425" width="650" class="" layout="responsive"></amp-img>GEB stands to lose Rs 2,000 crore a year<p>The Dilip Parikh Government in the state is definitely in a big hurry. After the state Assembly was dissolved on December 25, the Rashtriya Janata Party (RJP) is counting its days in office. It is obvious that the party cannot wait for the Lok Sabha polls to be over before it takes some crucial decisions.</p><p>As the RJP's return to power after the state Assembly elections is uncertain, it would ideally like to clear the way for a few power projects even if it means breaching the Election Commission's (EC) fiat against taking policy decisions regarding the sector until after the mid-term polls.<br><br>The state Government has not only announced a new captive power plant (CPP) policy, but is also in the process of finalising deals with private parties on barge-mounted power station projects. In related decisions, Parikh also transferred Deputy Energy Secretary R.P. Gupta, allegedly for opposing the Government's moves, while rewarding Principal Energy Secretary A. Prasad with a six-month extension beyond his retirement for cooperating with the powers that be. </p><p>Prasad has also been appointed chairman of the Gujarat Electricity Board (GEB) for three years. Incidentally, Prasad continues to be the managing director of the Ahmedabad Electricity Company, which was taken over by the Torrent Group three months ago. </p><p>These steps have stirred a hornets' nest because of the casual manner in which the EC's ban on policy decisions in the power sector was flouted by the state Government. The chief minister, of course, justifies the Government's actions as being well within its right. "The Government can't stop functioning just because polls have been announced," he says. Criticism, however, is growing.</p><table>


<tbody><tr><td>
  <div align="center"><b>Nth Minute Decisions</b><br>
    <hr size="2" width="100%"></div>
  <ul><li>The Government approves captive power plant policy on December 22, three days before the Assembly is dissolved.</li><li>Deputy Energy Secretary R.P. Gupta is transferred, allegedly for opposing the decision on the power policy.</li><li>Principal Energy Secretary A. Prasad is given an extension of six months
 after retirement and also appointed chairman of the Gujarat Electricity
 Board.</li><li>Government exempts 20 lakh sq m plot in Ahmedabad from the Urban Land Ceiling Act as a favour to a supporter. Nth Minute Decisio</li></ul>

  
  
  </td></tr></tbody>
</table></p><p>"If a high-level probe is ordered into these decisions, some RJP leaders as well as a few bureaucrats, who are party to these deals, could find themselves behind bars," maintains former chief minister Suresh Mehta of the BJP. Says another former chief minister, Chhabildas Mehta of the Congress: "The RJP Government is literally on a plundering spree."<br></p><div class="itemcenter"><amp-iframe height="62" title="" width="320" sandbox="allow-forms allow-scripts allow-same-origin allow-popups allow-top-navigation allow-top-navigation-by-user-activation" allowfullscreen src="https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fakm-img-a-in.tosshub.com%2Fsites%2Findiatoday%2Fbanner%2Fpreferred-source-new.html%3Fv%3D1.014%5Cu0026native%3D1" class="mrBt15 preferred-source-banner"> </amp-iframe></div></p><p>Much of the criticism is directed at the new CPP policy. Indeed, the decision to implement the policy virtually means that the GEB stands to lose an estimated Rs 2,000 crore a year. And what rankles is that the Government is aware of the financial implications of the policy. </p><p>When it received the policy proposal from the Energy Department for clearance, the state Finance Department not only rejected it but noted that "the new policy will ruin the state's finances for all time to come". </p><p>But almost cursorily, the Government omitted the opinion of the Finance Department in the policy which was finalised on December 22, five days after the EC's guidelines came into effect. Ordinarily, when a policy with financial implications is announced, the Government is required to make a noting in the policy draft that the policy has the Finance Department's concurrence.<br><br>Further violation of procedures was averted the same day when the Government's attempts to finalise some power projects came to nought. The Gujarat Power Corporation Ltd, a Gujarat Government subsidiary dealing with private power projects, met that day but could not give the green signal to seven barge-mounted private power projects of 70 MW each, estimated to cost a total of Rs 2,000 crore, following a hue and cry in the press. </p><p>But if that was the saving grace, the Government had already broken established norms when it set a deadline of just three days for bids in the global tender floated for the seven projects. No wonder, the state BJP spokesman Haren Pandya says, "A blatant mopping-up operation is on."<br><br>The CPP policy threatens to break the back of the GEB. Industrial consumers are likely to ignore the state board and set up their own power plants because the Government has removed the ceiling of 60 MW for CPPs. </p><div class="itg-mosimage"><amp-img src="https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fakm-img-a-in.tosshub.com%2Fsites%2Fmedia2%2Findiatoday%2Fimages%2Fstories%2F1998January%2Fpower2_090412023100.jpg" alt="" height="425" width="650" class="" layout="responsive"></amp-img>Dilip Parikh</div></p><p>More significantly, CPP-owning industrial houses will now be allowed to transfer power to their subsidiary units (described as projects with a 40 per cent equity stake) using the GEB grid. This means that an industrial house can now set up a CPP of a capacity of its choice and transfer any additional power to its subsidiaries.<br><br>In addition, the policy reverses the Power Department's decision to impose an electricity duty on CPPs in order to bring parity in the cost of power of the CPPs and the GEB. At present, power from the GEB is costlier by Rs 1.85 per unit because it has to subsidise power supplied to the agriculture sector.</p><p>But this disparity was more or less neutralised by the limit of 60 MW placed on power generated privately by industrial houses and the bar on transfer of power to subsidiaries. Under the new policy, however, it is likely that industrial consumers, who also have to pay a 20 per cent duty on power purchased from the GEB, will be encouraged to put up their own CPPs.<br><br>The total power produced by CPPs in Gujarat currently is about 800 M W, while projects for an additional 1,600 MW are in the pipeline. According to senior IAS officials, at least 1,000 MW of the total 2,500 MW that industry currently acquires from the GEB could now be generated by CPPs put up by industrial houses. </p><p>A senior bureaucrat has estimated that the loss to the state exchequer and the GEB on this account would be to the tune of Rs 2,000 crore a year, a sum that could render the GEB bankrupt in the next few years. "The policy will sound the GEB's death-knell," says a senior bureaucrat. </p><p>What seems to expose the Government's ulterior motives in finalising the policy is the fact that it hasn't made any official announcement regarding the policy so far. <br><br>Rather embarrassingly for Parikh, Gupta sent a letter of protest to the Gujarat IAS Officers' Association to complain that he had been tranferred from the Energy Department because he had refused to toe the Government line on the controversial decisions. In it, he also listed some decisions of the Parikh Government which he considers questionable. </p><table>

<tbody><tr><td>
  <div align="center"><b>What exposes Parikh's motives is the fact that the policy has not been publicised.</b></div></td></tr></tbody></table></p><p>An example: the equally debatable action in granting an extension of six months to Prasad and his simultaneous appointment as the chairman of the GEB. Prasad reportedly was instrumental in pushing through almost half a dozen disputable decisions in the power sector at the RJP's behest in the past few months. Says Suresh Mehta: "It is clear that Prasad has been rewarded for the help he has rendered the RJP."<br><br>The CPP policy was not the Gujarat Government's only dubious decision. In another controversial step last week, the Government exempted 20 lakh sq m of prime land in Ahmedabad from the Urban Land Ceiling Act, allegedly as a favour to a top Ahmedabad builder, again in violation of the EC's guidelines. Parikh is clearly on the defensive, but continues to smugly parry all uncomfortable questions. </p><p>He claims that the decision regarding the new CPP policy was taken much before he recommended dissolution of the state Assembly. But the date on the Government resolution approving the policy reads "December 22". </p><p>As for the charge that the policy will cause huge losses to the state exchequer, the chief minister glibly says that it is in step with the mood of economic liberalisation in the country. In fact, he says with belligerence: "The accusations of foul play are part of the moves of rivals to malign our party."<br><br>The Lok Sabha elections are to be held in February and presumably, a new state Assembly will also be elected simultaneously. The BJP and the Congress are sure to raise these issues during electioneering. Eventually, therefore, it will be the people who will decide on the rights and wrongs of the RJP Government.<br></p><div id="tab-link-wrapper-plugin"><div class="authors__container"><div class="authors__by"><div class="authlable">Published By: </div><div class="authdetaisl">AtMigration </div></div><div class="published__on"><div class="authlable">Published On: </div><div class="authdetaisl">Jan 12, 1998</div></div></div><div class="sendros">--- ENDS ---</div></div></div>

states

States

<div class="itg-mosimage"><div class="itgimage"><img  title=""  class="" alt="" src="https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fakm-img-a-in.tosshub.com%2Fsites%2Fmedia2%2Findiatoday%2Fimages%2Fstories%2F1998January%2Fpower1_090412023239.jpg" loading="lazy" /></div>GEB stands to lose Rs 2,000 crore a year<p>The Dilip Parikh Government in the state is definitely in a big hurry. After the state Assembly was dissolved on December 25, the Rashtriya Janata Party (RJP) is counting its days in office. It is obvious that the party cannot wait for the Lok Sabha polls to be over before it takes some crucial decisions.</p><p>As the RJP's return to power after the state Assembly elections is uncertain, it would ideally like to clear the way for a few power projects even if it means breaching the Election Commission's (EC) fiat against taking policy decisions regarding the sector until after the mid-term polls.<br><br>The state Government has not only announced a new captive power plant (CPP) policy, but is also in the process of finalising deals with private parties on barge-mounted power station projects. In related decisions, Parikh also transferred Deputy Energy Secretary R.P. Gupta, allegedly for opposing the Government's moves, while rewarding Principal Energy Secretary A. Prasad with a six-month extension beyond his retirement for cooperating with the powers that be. </p><p>Prasad has also been appointed chairman of the Gujarat Electricity Board (GEB) for three years. Incidentally, Prasad continues to be the managing director of the Ahmedabad Electricity Company, which was taken over by the Torrent Group three months ago. </p><p>These steps have stirred a hornets' nest because of the casual manner in which the EC's ban on policy decisions in the power sector was flouted by the state Government. The chief minister, of course, justifies the Government's actions as being well within its right. "The Government can't stop functioning just because polls have been announced," he says. Criticism, however, is growing.</p><table style="margin-left: 8px; background-color: rgb(229, 229, 229);" align="right" border="1" cellpadding="3" cellspacing="3" height="134" width="290">


<tbody><tr><td>
  <div align="center"><b style="color: rgb(204, 0, 0);">Nth Minute Decisions</b><br>
    <hr size="2" width="100%"></div>
  <ul><li>The Government approves captive power plant policy on December 22, three days before the Assembly is dissolved.</li><li>Deputy Energy Secretary R.P. Gupta is transferred, allegedly for opposing the decision on the power policy.</li><li>Principal Energy Secretary A. Prasad is given an extension of six months
 after retirement and also appointed chairman of the Gujarat Electricity
 Board.</li><li>Government exempts 20 lakh sq m plot in Ahmedabad from the Urban Land Ceiling Act as a favour to a supporter. Nth Minute Decisio</li></ul>

  
  
  </td></tr></tbody>
</table></p><p>"If a high-level probe is ordered into these decisions, some RJP leaders as well as a few bureaucrats, who are party to these deals, could find themselves behind bars," maintains former chief minister Suresh Mehta of the BJP. Says another former chief minister, Chhabildas Mehta of the Congress: "The RJP Government is literally on a plundering spree."<br></p><div class="itemcenter"><iframe scrolling="no" allowfullscreen="" frameborder="0" width="100%" height="62" awidth="320" aheight="62" amplayout="fixed" src="https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fakm-img-a-in.tosshub.com%2Fsites%2Findiatoday%2Fbanner%2Fpreferred-source-new.html%3Fv%3D1.014" class="preferred-source-banner" loading="lazy"></iframe></div><style>.preferred-source-banner{  margin-top: 10px; margin-bottom:10px;}</style></p><p>Much of the criticism is directed at the new CPP policy. Indeed, the decision to implement the policy virtually means that the GEB stands to lose an estimated Rs 2,000 crore a year. And what rankles is that the Government is aware of the financial implications of the policy. </p><p>When it received the policy proposal from the Energy Department for clearance, the state Finance Department not only rejected it but noted that "the new policy will ruin the state's finances for all time to come". </p><p>But almost cursorily, the Government omitted the opinion of the Finance Department in the policy which was finalised on December 22, five days after the EC's guidelines came into effect. Ordinarily, when a policy with financial implications is announced, the Government is required to make a noting in the policy draft that the policy has the Finance Department's concurrence.<br><br>Further violation of procedures was averted the same day when the Government's attempts to finalise some power projects came to nought. The Gujarat Power Corporation Ltd, a Gujarat Government subsidiary dealing with private power projects, met that day but could not give the green signal to seven barge-mounted private power projects of 70 MW each, estimated to cost a total of Rs 2,000 crore, following a hue and cry in the press. </p><p>But if that was the saving grace, the Government had already broken established norms when it set a deadline of just three days for bids in the global tender floated for the seven projects. No wonder, the state BJP spokesman Haren Pandya says, "A blatant mopping-up operation is on."<br><br>The CPP policy threatens to break the back of the GEB. Industrial consumers are likely to ignore the state board and set up their own power plants because the Government has removed the ceiling of 60 MW for CPPs. </p><div class="itg-mosimage"><div class="itgimage"><img  title=""  class="" alt="" src="https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fakm-img-a-in.tosshub.com%2Fsites%2Fmedia2%2Findiatoday%2Fimages%2Fstories%2F1998January%2Fpower2_090412023100.jpg" loading="lazy" /></div>Dilip Parikh</div></p><p>More significantly, CPP-owning industrial houses will now be allowed to transfer power to their subsidiary units (described as projects with a 40 per cent equity stake) using the GEB grid. This means that an industrial house can now set up a CPP of a capacity of its choice and transfer any additional power to its subsidiaries.<br><br>In addition, the policy reverses the Power Department's decision to impose an electricity duty on CPPs in order to bring parity in the cost of power of the CPPs and the GEB. At present, power from the GEB is costlier by Rs 1.85 per unit because it has to subsidise power supplied to the agriculture sector.</p><p>But this disparity was more or less neutralised by the limit of 60 MW placed on power generated privately by industrial houses and the bar on transfer of power to subsidiaries. Under the new policy, however, it is likely that industrial consumers, who also have to pay a 20 per cent duty on power purchased from the GEB, will be encouraged to put up their own CPPs.<br><br>The total power produced by CPPs in Gujarat currently is about 800 M W, while projects for an additional 1,600 MW are in the pipeline. According to senior IAS officials, at least 1,000 MW of the total 2,500 MW that industry currently acquires from the GEB could now be generated by CPPs put up by industrial houses. </p><p>A senior bureaucrat has estimated that the loss to the state exchequer and the GEB on this account would be to the tune of Rs 2,000 crore a year, a sum that could render the GEB bankrupt in the next few years. "The policy will sound the GEB's death-knell," says a senior bureaucrat. </p><p>What seems to expose the Government's ulterior motives in finalising the policy is the fact that it hasn't made any official announcement regarding the policy so far. <br><br>Rather embarrassingly for Parikh, Gupta sent a letter of protest to the Gujarat IAS Officers' Association to complain that he had been tranferred from the Energy Department because he had refused to toe the Government line on the controversial decisions. In it, he also listed some decisions of the Parikh Government which he considers questionable. </p><table style="margin-left: 8px; background-color: rgb(229, 229, 229);" align="right" border="1" cellpadding="3" cellspacing="3" height="1" width="290">

<tbody><tr><td>
  <div align="center"><b style="">What exposes Parikh's motives is the fact that the policy has not been publicised.</b></div></td></tr></tbody></table></p><p>An example: the equally debatable action in granting an extension of six months to Prasad and his simultaneous appointment as the chairman of the GEB. Prasad reportedly was instrumental in pushing through almost half a dozen disputable decisions in the power sector at the RJP's behest in the past few months. Says Suresh Mehta: "It is clear that Prasad has been rewarded for the help he has rendered the RJP."<br><br>The CPP policy was not the Gujarat Government's only dubious decision. In another controversial step last week, the Government exempted 20 lakh sq m of prime land in Ahmedabad from the Urban Land Ceiling Act, allegedly as a favour to a top Ahmedabad builder, again in violation of the EC's guidelines. Parikh is clearly on the defensive, but continues to smugly parry all uncomfortable questions. </p><p>He claims that the decision regarding the new CPP policy was taken much before he recommended dissolution of the state Assembly. But the date on the Government resolution approving the policy reads "December 22". </p><p>As for the charge that the policy will cause huge losses to the state exchequer, the chief minister glibly says that it is in step with the mood of economic liberalisation in the country. In fact, he says with belligerence: "The accusations of foul play are part of the moves of rivals to malign our party."<br><br>The Lok Sabha elections are to be held in February and presumably, a new state Assembly will also be elected simultaneously. The BJP and the Congress are sure to raise these issues during electioneering. Eventually, therefore, it will be the people who will decide on the rights and wrongs of the RJP Government.<br></p><div id="tab-link-wrapper-plugin"><div class="authors__container"><div class="authors__by"><div class="authlable">Published By: </div><div class="authdetaisl">AtMigration </div></div><div class="published__on"><div class="authlable">Published On: </div><div class="authdetaisl">Jan 12, 1998</div></div></div><div class="sendros">--- ENDS ---</div></div></div>

In violation of all established norms, the caretaker RJP Government pushes through a controversial power policy ahead of the assembly elections.

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In violation of all established norms, caretaker RJP Government in Gujarat pushes through controversial power policy ahead of assembly elections

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In violation of all established norms, caretaker RJP Government in Gujarat pushes through controversial power policy ahead of assembly elections

In violation of all established norms, the caretaker RJP Government pushes through a controversial power policy ahead of the assembly elections.

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