Union Power Minister Sushil Kumar Shinde on Tuesday said the government has been taking steps to attract foreign direct investment in the power sector.
Addressing reporters in the backdrop of the signing of a power pact between the Gayatri Projects, a Hyderabad-based infrastructure firm and Singapore's Sembcorp to set up a 1,320 MW power project at Krishnapatnam in Nellore district, Shinde said the pact provided for 100 percent FDI under the Electricity Act, 2003.
Despite the huge benefits in the power sector investments, there were not many takers, Shinde said and added only two to three foreign investors came forward for setting up their units.
However, the government has taken steps to help instill confidence among the foreign investors and ensure the growth of the sector, he claimed.Shinde said “this is the first FDI since he took over as the power minister four-and-half years ago.”
"Two months ago they (Sembcorp) met and I assured them of all support. I was a little bit doubtful whether this agreement would come through because many people come, inquire and go away," he said.
He said the government paid Rs.10,000 crore to Enron though the commitment was made by the previous NDA government.
He said Prime Minister Manmohan Singh decided to fulfil the commitment as he did not want India's image to suffer. "Today Ratnagiri plant (as Enron project is now called) is producing 1,900 MW of power," he said.
Shinde said though 42,000 MW of power generation was targeted during the 10th plan, only 21,000 MW could be achieved.
Shinde said India needed bigger generation capacity as it was aiming to achieve 1,000 units per capita consumption by 2012. At present, the country's per capita power consumption is 700-800 units.
Chief Minister K Rosaiah urged Union Minister to speed up the clearances for the power projects in the state. He said the state was uniquely positioned to emerge as a power hub as it has abundant coal and natural gas reserves.