If current indications and Modi´s previous track record are anything to go by, the new NDA government is poised to shape a renaissance for the country´s power sector. In fact, one of the first initiatives of the Gujarat government when Modi took over as Chief Minister was reform of the State´s power sector. The electricity board went through financial restructuring and employee reorientation, but Modi´s masterstroke was separating the power feeder input into two lines: one for agricultural needs and the other for household consumption.?
I am particularly impressed by the way Modi turned Gujarat into a power-surplus State. All stakeholders concerned had a say in the reform process. That´s the kind of structured, wholistic reform process that´s needed at the national level. At this stage, we do not have to again go into what has to be done to reform the power sector. Regular readers of this publication will know how we have been raising issues that should be on the reform agenda. What´s needed now is a few more masterstrokes, on the lines of the PM-designate´s invite to SAARC nations for his swearing-in ceremony.
One such great move would be to strike a deal with Russia for supply of gas, a long-term contract that´ll go a long way to resurrect our gas-starved plants and also ensure our country´s energy security.
We really don´t have an alternate plan to secure our gas supplies. The TAPI (Turkmenistan-Afghanistan-Pakistan-India) project is bound to be stillborn, given the complexities involved in laying (and maintaining) the gas pipeline. The proposed route would have snaked through some precarious regions in Afghanistan and Pakistan which are effectively controlled by local militia. Again, any agreement with Iran for a pipeline running through Pakistan will surely face severe opposition from the US.
Modi is bound to take a leaf out of China´s book and look at firming up a multi-pronged energy deal with Russia. Beijing´s $400 billion, 30-year natural gas deal with Moscow has shaken up world markets. Crimea-scarred Russia is now firmly turning away from its (erstwhile) core European markets and India will soon be an integral part of Moscow´s look-east focus. In fact, Russia´s Rosneft (the top listed oil producer by output) and ONGC are looking at joining hands for a long-term energy deal. Analysts are also hinting that any future India-Russian long-term energy deal might not be denominated in dollars, and the two countries might agree to payments made in rubles or rupees. And Modi has also done business with China in the past in his capacity as Gujarat´s Chief Minister.
A Russia-China-India energy axis might be on the cards. The geopolitical map of the world is in for a major overhaul.
These are exciting times for our power sector. I look forward to your thoughts, do continue to write in.
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