AT THE one-room, one-machine, one-man enterprise in Coimbatore called Bala Engineering Services, Sasikumar steals a glance at the dark lightbulb. As soon as it lights up after a two-hour power cut, his sleep-deprived eyes don‚Äôt bat an eyelid as he switches on the surface-grinding machine. Its abrasive wheel spins into action finishing off small discs that would eventually be part of a wet grinder ‚ÄĒ a speciality appliance for which this industrial city in Tamil Nadu boasts of a Geographical Indication.
‚ÄúI get up at 6 am and sleep at 2 am,‚ÄĚ says Sasikumar, 32. ‚ÄúFor every two hours of power, there is a power cut for four hours. The power can go off anytime. I have to make sure that when the power comes, I‚Äôm not sleeping.‚ÄĚ
For Sasikumar and thousands of micro-entrepreneurs, buying and running a diesel generator is beyond their means. ‚ÄúI used to make Rs 15,000 as profit every month. Now it has come down to Rs 5,000,‚ÄĚ he says. ‚ÄúThe government says the situation will improve this year. I‚Äôm hopeful. Shutting down is not an option.‚ÄĚ
Everyone living outside Chennai are bearing the brunt of power cuts ranging anywhere from six to 16 hours in a crisis that most believe is the worst the state has seen since 2011. For Chief Minister J Jayalalithaa, time is running out to assuage the people whose woes will multiply as the summer progresses.
‚ÄúRight now, Tamil Nadu‚Äôs power requirements are met by burning diesel. How long can people survive like this in a country where diesel prices and demand are rising is anybody‚Äôs guess,‚ÄĚ says former Union power secretary RV Shahi.
The state is currently experiencing a shortage of close to 3,500-4,000 MW ‚ÄĒ almost a third of its demand of 12,000 MW, which is estimated to grow at 10 percent annually. In a power hungry state whose per capita power consumption is almost double the national average, a promised 6,000 MW of projects are still in various stages of completion.
Although much has been written about the crisis, there is no clear consensus yet on how things came to such a mess.
‚ÄúThe Centre initiated the damage by introducing Section 43A in the Electricity Act, 1948, to encourage private players and then successive regimes bled the Tamil Nadu Electricity Board (TNEB),‚ÄĚ says Chennai-based social activist Sarangabani Gandhi. ‚ÄúThe last time the state built a power plant was in 1994 with a 210 MW thermal project in Chennai. The difference between the power cuts of 1980 and 2013 is that earlier there was a serious shortage. Now power has become so expensive that the government has no money to buy it. So they are forced to go for load-shedding.‚ÄĚ
So what exactly brought the state on the edge of a precipice and what could potentially be done to overcome the crisis?
The Tamil Nadu Electricity Generation and Distribution Corporation (TANGEDCO) has accumulated a staggering loss of Rs 14,547 crore as of 2012-13, which is more than half the state‚Äôs entire fiscal deficit. So, neither does the state have the money to build new projects, nor does it have the resources to buy power from other sources.
Many blame the present crisis on DMK supremo M Karunanidhi‚Äôs fourth term (1996 to 2001) when the government went on a contract-awarding spree to private developers. The developers sold power at astronomical cost to the state with Power Purchase Agreements (PPAs) so skewed that it almost bled the TNEB to death.
Although many other states were doing the same, what set Tamil Nadu apart was the high economic growth and the resultant demand for power that came at a huge cost and created a situation where the state found itself bankrupt.
The DMK regime signed contracts with these companies after coming to power:
‚ÄĘ GMR Power Corporation for a 196 MW plant running on Low Sulphur Heavy Stock (LSHS) diesel at Basin Bridge near Chennai in September 1996. Project commissioned in 1998
‚ÄĘ ST-CMS Power Corporation for a 250 MW lignite-powered thermal plant at Uthangal in Cuddalore district in December 1996. Commissioned in 2002
‚ÄĘ¬†PPN Power Generating Company owned by Apollo Hospitals founder Dr Prathap Reddy for a 330.5 MW natural gas/naptha plant in Nagapattinam district in January 1997. Commissioned in 2001
‚ÄĘ In 1998, two projects with US-based Covanta Energy Corporation were signed: Madurai Power Corporation Pvt Ltd (MCPCL) for a 106 MW plant in Madurai and Samalapatti Power Pvt Ltd (SPPL) for a 105.66 MW plant in Krishangiri district. Both used LSHS diesel and were commissioned in 2001
More than the fact that the DMK regime chose not to initiate any new state-backed projects during the period, it is the content of the PPAs and the high tariffs that were fixed for buying power that shocked many.