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General election: Energy sector set for revamp on BJP win

According to reports, there are still nine days to go before the results of Lok Sabha elections are declared on May 16. But the BJP-led NDA is already confident of winning and has prepared a prescription to overhaul the entire energy sector. From removing the bottlenecks in coal supplies, to reworking gas prices, from reforming the distribution companies to redoing the process for allocation of oil and gas blocks to reviewing India’s nuclear policy, party leaders say they have worked everything out.

The BJP’s energy cell is finalizing a paper giving its recommendations.

The national convener of BJP ‘s energy cell, Narendra Taneja in an exclusive interview to Business Today, said his party was of the view that more consultations should be held with players in the oil and gas sector before pushing the next round of the New Exploration Licensing Policy under which oil and gas blocks are allotted. This means that if the Narendra Modi led NDA comes to power, the current process of calling for bids, will be halted.

On January 12, M. Veerappa Moily set the ball rolling on the 10th round of NELP offering 46 blocks. “If we see the progress of the last nine rounds, we find there are no big foreign players in the exploration business in India. The ones who had invested have either already left or are ready to leave. Domestic players too are not that happy.  This means that there is something wrong in the system. We will go back to them, understand their problems and then rework the policy regime.”

He said gas pricing too requires a relook. CPI leader Gurudas Dasgupta and AAP chief Arvind Kejriwal have strongly criticized the new gas pricing formula adopted by the UPA regime (which has yet to be implemented).

“Presently, players are coming up with different suggestions and even complaints about the new formula. We have not finalized the alternative formula. This would be the work of the government of the day. But I can assure you that if the NDA comes to power, gas pricing will be more practical,” said Taneja.

Another top leader of BJP said that having the same price for gas irrespective of its source might not be a practical approach. “There could be different prices for different types of blocks -onland, shallow or deep water- and unconventional,” the leader said. “One will also have to take the local market (power and fertilizer sector) also in consideration before fixing the price.”

The BJP has also inducted former petroleum secretary, R.S. Pandey. His idea of having national gas grid might also see the light of day.

Talking about another contentious issue, Taneja said, the entire value chain was in a mess. “From coal, distribution, transmission, you name it, there will is trouble waiting for you,” he added. Indeed, at Business Today’s power breakfast on May 6, various leaders in the power sector pointed out the problem areas. Ravi Uppal, MD & Group CEO of Jindal Steel & Power, said most of the problems in power sector could be resolved if the country had a common umbrella ministry for energy, with power, oil and gas, coal and renewable resources, all under it.

However, in these days of alliance politics, this is very difficult preposition. Most of the BJP leaders believe that strong leadership can make up for this fragmentation of decision  making. “Modi has the idea of having a committee comprising the prime minister and chief ministers of states where the latter too will be part of the decision making. This can be fruitful in resolving various issues related to executing projects,” said one of the top BJP leaders.

The All India Power Engineers’ Association, believes the new government must review the decade long power reforms, before pushing in newer ones. “Autonomy and  independence of Regulators is completely eroded. This could be because of interference by state governments even in tariff matters under the garb of public interest. Most of the regulatory commissions are headed by retired bureaucrats who are enjoying all powers without any responsibility,” says V.K. Arora, Secretary at the north India chapter of the association.

Taneja said the reforms had to start from top. First the allocation of coal blocks needed to be overhauled, he added. There was need to bring in newer technology.

“The current mining method (open cast) is too old a way of extracting coal, we need to get on to this underground mining in most of the new blocks,” he said.  He says, in power sector (including coal), states will have to be taken in confidence, and here Modi’s idea of PM-CM committee can play an important role. But seeing these vicious campaign in this general elections, this looks little difficult. “Once the elections are over, things would ease out and it would be business as usual for politicians,” Taneja said. In his campaign in Bihar, UP, west Bengal, Orissa Modi has been raking the issue of non availability of round the clock power. Meanwhile, Taneja added that they have plans to push for solar based power generation, both at large farms as well as off the grid.

Earlier BJP leader, Murlimanohar Joshi, told BT that BJP would reconsider the nuclear policy to make it more robust. Taneja says, time has come for the country to do out of the box thinking. The import of fuel might swell to $1.25 trillion in 2035 -including imports of oil, gas, uranium and coal-the delay might mean that the opportunity is lost.

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