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TN-leverage strength of BHEL, NLC...

I had referred to this issue earlier: the reluctance of the Dravidian parties to leverage the strengths of large flourishing public sector enterprises in the state. These have been, by and large, brought about by the Congress government in power up to 1967- like the Integral Coach Factory, Neyveli Lignite Corporation, Bharat Heavy Electricals-Tiruchi, Salem Steel Plant – SAIL (though it was set up in 1970 it was sanctioned at the initiative of Indira Gandhi) and Madras Refineries (now the Chennai Petroleum Corporation). These have been flourishing with large land and infrastructure that would lend for easy expansion. BHEL-T, for instance, produces goods worth around Rs 17,000 crore on consistent, profitable terms. NLC has been among the highly profitable PSUs for three decades contributing significantly to the economy of the state through royalty on the lignite mined and supply of cheap power for five decades.

The adversarial relations of the Dravidian parties for the greater part of their reign resulted in the loss of opportunity to leverage the substantial strengths of these PSUs. The ministers of the Congress party at the Centre often used this more effectively: N D Tiwari got an adjunct to BHEL-T in Rudrapur, his home state in U.P. More recently,   Sriprakash Jaiswal as Coal Minister got NLC expand into his home state of UP on a Rs 6000 crore power project. Earlier, NLC was taken to Rajasthan for opening up lignite mines.

It is not as if only Congress leaders took advantage of such leverage: Chandrababu Naidu while lending support to the NDA 1, got BHEL invest in 2x1000 MW power plants at Simhadri in A.P. The entire power is used by AP. The DMK, which was part of the Union government continuously from1999 up to 2013 did not exert overmuch to work on such a route to leverage on the strengths of flourishing PSUs in the state. At the height of the power shortage in 2006-07 the party announced a spate of large new projects. In fact then Electricity Minister Arcot Veerasamy painted a rosy picture: that after five years Tamil Nadu will be hugely surplus in power earning massive revenues by selling power.

One of the projects was a 2x660 MW power plant at Udangudi to be built jointly by BHEL and TANGEDCO. There was also an ultra mega power project of 4000 MW announced for Tamil Nadu at Cheyyar. Despite the power wielded by DMK as part of the UPA, precious little work was done either in getting the needed environment clearances, coal linkages or on financial closures. Ditto for Cheyyar. BHEL, flush with money and was willing to take care of substantial portion of funding, supplying the equipment, constructing the project and managing it, was helpless with the utter unconcern of the state leadership.

Look at the irony: Jagatrakshagan, who was catapulted as a member of the Lok Sabha soon after crossing over from AIADMK to DMK and further getting appointed as minister in UPA II, was more keen to float a company at Puduchery to get an allotment of a coal mine; the other, politically-savvy B G Raghupathy was active and successful in getting orders from TANGEDCO (Mettur thermal) for the supply of not proven and cheaper Chinese power equipment. (These continue to fail in delivering the promised output).

The TN government cancelled the order to BHEL for Udangudi in 2012. Three years after re-tendering and re-re-tendering, the project is still in a limbo. The Simhadri plant, in contrast, has been operating to a high plant load factor and has already earned back  the investments made.

Also remember the havoc caused by power shortages in the state for few years now. The neglect of investments for over two decades on creating fresh capacity,  for rendering TANGEDCO sick  by purchase of power at high cost in large volumes and through massive subsidies on power not compensated fully and in time for TANGEDCO are costing the state dearly.


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