Gujarat to slip in energy, infra sectors

For May, 2018, Gujarat was power deficient, a downgrade from its power self-sufficient status a year back. The slip in energy sufficiency may be attributable to certain developments but industry experts and industry officials say the state may be losing its sheen in energy and infrastructure sectors. Some early indicators, they suggest, are project delays, cost-overruns, unfriendly toll policies and lack of significant new project opportunities.

Gujarat had 7 per cent of its peak power demand unmet in May compared to the all-India figure for peak power deficit of 1.4%, indicating that Gujarat is looking at a higher side of insufficiency. According to Central Electricity Authority (CEA) data, of Gujarat’s peak demand of 17,016 Mw, 1,198 Mw was unmet in May.

There is more data to indicate not all maybe well with the state. Data sourced from CARE ratings shows of the 48 projects, which were under implementation as of March in the state, 10 are facing cost overrun, six-time overrun and one project has both time and cost overrun. “Twenty of the 48 projects are legacy or pre2014 projects. Three mega projects are facing cost overrun and 1 is facing time overrun,” CARE said in an email response. Some others said there was a slowdown in terms of new projects. “We do not see much activity on state roads happening now. Work on GIFT city is on, but this was conceived earlier,” said an industry expert, requesting anonymity.

Under the state's tolling policy for roads, passenger cars have been exempted from the levy since August 2016. “This has impacted developer interest in the road sector. The exemption was to be compensated, but that is coming with a lag and the amount is given on an ad hoc basis,” he added.