NEW DELHI (PTI): Forty one members of Parliament in India have Strongly Opposed governments recent decision to clear certain power Projects in the Private sector with foreign investment totaling nearly Rs 130,000 million.
In a memorandum forwarded to Prime Minister P.V.Narasimha Rao the M.P.s as also some former chairmen of the central electricity authority have raised objections to the commercial basis of clearances of the projects.
Government had last week announced that it had approved seven Major power projects for foreign investment and their estimated cost was over Rs 210,000 million including a foreign exchange component of over Rs 120,000 million.
The major issues involved in the above clearances is the extremely high costs per unit which would be paid to the private companies by electricity boards the burden of additional losses being placed on the boards and the extremely high return on capital being guaranteed by the government to cover all risks of the private sector investments.
The most controversial clement of the power policy the MPs said was the 16% return of equity being guaranteed for any private or foreign investment. In addition investors were being allowed complete foreign exchange compensation for any depreciation of the rupee and a tax holiday they said.
Article extracted from this publication >> January 21, 1994
