Power firms reduce capital expenditure

The capital expenditure of 25 top listed power companies declined 15 per cent to Rs 112,687 crore in 2012-13. The decline in investment may result in a considerable generation and supply crunch by the end of the current Plan, in 2016-17. The fall in capital expenditure is attributed to poor investor sentiment, on the back of uncertainty in fuel supply, regulatory affairs and the policy framework.

For example, Lanco Infratech reduced fresh capital expenditure by 81 per cent to Rs 3,360 crore. Adani Power reduced capex by 52 per cent to Rs 6,771 crore. Similarly, Reliance Power reduced capex by 42 per cent to Rs 11,284 crore and NHPC pared capex by 23 per cent to Rs 3,130 crore.

Power Minister Jyotiraditya Scindia said capex by the private sector, which is expected to infuse more than half of the total funding in the 12th Plan, shrank 44 per cent to Rs 54,000 crore. Besides, factors like exchange rate fluctuations, high cost of funding and, in some cases, changing global market trends dampened investor sentiment in the sector.