Power sector to miss 11th Plan targets

July 31st, 2008 - 10:38 pm ICT by IANS  

New Delhi, July 31 (IANS) The government may miss its power capacity addition target set for the 11th Five-Year Plan due to rising cost of cement, steel and other materials used in building power plants, said an industry lobby Thursday. According to a study by the Associated Chambers of Commerce and Industry of India (Assocham), the key input requirements like cement, steel, aluminium, copper and zinc have seen an increase of 25 percent over the last two years.

“The Planning Commission has estimated the fund requirement of Rs.4.11 trillion for the likely capacity addition of 68,869 MW during the 11th Plan,” said Assocham president Sajjan Jindal.

“However, considering the recent trends in inflation, this amount is now seen as substantially low. Therefore, there should be an upward revision for the funds to be invested in the power sector to ensure that the 11th Five-Year plan targets are met,” Jindal added.

The declining growth rate of the Rs.60 million infrastructure industries could also pose problems for the power projects, the report said.

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