Nearly 80 per cent of the coal-based power projects in the private sector are far behind the schedule of commissioning, industry body Assocham said on Thursday.

The primary reason for delay is pending regulatory clearances. The remaining 20 per cent of the projects, which are on schedule till now, are also facing threats related to policy framework and uncertainty over coal linkages continue to prevail.

Assocham said that excepting a handful of projects being promoted by the front-ranking industrial houses including the Tatas, Reliance Power, O P Jindal and India Bulls, most other projects are running behind schedule.

In fact, different units of Tata Power at Mundra in Gujarat are running ahead of schedule, even though the power sector is facing a severe problem of expensive coal, it added.

Total capacity addition

Out of the total capacity addition to be achieved by the private sector projects, only about 7,000 mega watt (MW) will be commissioned on time by the end of this year and next year, while there could be long delays for the rest of about 44,000 MW planned in the 11th Plan, according to data compiled by Assocham.

“This is rather bad news, especially when India is a big energy deficit country and the industrial production is down and the investment sentiment weak,” said Assocham President Rajkumar N. Dhoot.

Power sector, both in the generation and distribution segments, continues to operate under several inefficiencies — which are low level of the plant load factor and high level of transmission and distribution losses.  Then, there are issues of coal linkages and the regulatory hassles such as environment approvals.

“It is thus no surprise that the bankers are also becoming wary of financing the power projects, given the policy uncertainty and other market risks including very high prices of coal in the international market,” the study pointed out.

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