CHANDIGARH: All India power engineers Federation ( AIPEF) strongly opposes mandatory letter of credit (LC) policy mechanism for Discoms issued by Ministry of power to facilitate the payment of private power producers without similar benefit to state generating companies.
V K Gupta A spokesperson of AIPEF said that the mandatory system of letter of credit (LC) opening would cause an upheaval in the power sector, particularly in uninterrupted power supply to consumers. Most of the power distribution companies across the country are not in a position to give required LC in advance due to their poor financial health which is the result of wrong populist policies of central and state governments.
He further said that this order is only to safeguard the interests of private power producers. The focus of government should be on improving efficiency, bringing down costs and improving the financial health of Discoms and not to wipe out the state power sector.
V K Gupta further said that the Niti Ayog strategy paper and power ministry’s vision document only advocate for privatisation of power supply and urban distribution franchisee. Vision document for power sector envisages path for privatization of power supply by segregating wire and content business. It also proposes introducing more private participation in transmission sector.
The policy of government is to help private power generators in the name of stressed power plants and has reopened the power purchase agreements for their benefits. However, the government is opposing reopening of power purchase agreements supplying power at exorbitant rates by state government with the plea that this will affect the market sentiments.