Political failure puts out lights
Aug 02, 2012
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India was hit by its second major power failure in 36 hours on Tuesday after its ailing national grid collapsed during peak hours. Millions of commuters were left stranded. Around half of India’s population of 1.2 billion people went without power for five hours.
India’s power minister, Sushil Kumar Shinde, recently promoted to interior minister, says the country’s northern states triggered the blackouts by drawing more than their power quota to help drought-stricken farmers irrigate their crops. However, opposition leaders said the cuts were a “huge failure of management in the power sector” by Prime Minister Manmohan Singh’s government.
What the commentators said:
“There’s a hole at the heart of India’s economy,” said Lex in the FT. “And since the lights don’t seem to work, the nation risks falling into it.” The sector’s economics “do not add up”. The fuel companies can’t produce enough coal for the power stations, so the shortfall has to be imported, raising input prices. But, as consumer electricity tariffs are capped, suppliers have to sell power at a loss.
India’s utilities have debts of $54bn and “the economics are only going to get worse” as power generators will have to import 20% of their coal and 40% of their gas supply by 2015 from about 10% today. This puts “enormous strain” on India’s banks. “Without far-reaching reform, Indians will continue to work in the dark.”
“India has felt like the giant set of a disaster movie,” said Banyan on Economist.com, and the blackouts – seemingly “selected by a malign God” – couldn’t have come at “a worse time”. The country faces a “slowing economy, a lame-duck government and a drought”.
After years of neglect, this has been a “disaster waiting to happen”. Coal India needs to be broken up, private-sector mining companies brought in and regulators given “more teeth”. But India’s politicians have long “ducked the challenge” and shown themselves unwilling to “tackle vested interests”.
Electricity companies are “headed by bureaucrats” and run with “little accountability”, agreed Randeep Ramesh on Guardian.co.uk. Meanwhile, China’s unelected leaders are “careful” to provide the masses with electricity and roads because these “legitimise dictatorship”. India’s free elections excuse politicians from “providing the basics of life to the masses who have elected them”.
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