India’s electricity grid collapsed for the second time in as many days, cutting off more than half the country’s 1.2 billion population in the nation’s worst power crisis on record.
Commuter trains in the capital stopped running, forcing the operator, Delhi Metro Rail Corp., to evacuate passengers, spokesman Anuj Dayal said. NTPC Ltd. (NTPC), the biggest generator, shut down 36 percent of its capacity as a precaution, Chairman Arup Roy Choudhury said by telephone. More than 100 inter-city trains were stranded, Northern Railway spokesman Neeraj Sharma said, as the blackout engulfed states in the north and east.
The failures have exposed the urgency behind Prime Minister Manmohan Singh’s effort to attract $400 billion in investment and ease an electricity deficit that is holding back economic growth in Asia’s third-biggest economy. The blackout today spread to at least five more states -- Bihar, Jharkhand, West Bengal, Orissa and Sikkim. Businesses and households in seven provinces yesterday turned to generators for at least 15 hours. The 12 states are home to about 640 million people.
“It points to yet another glaring hole in India’s infrastructure,” said Rohit Singh, an analyst with IDBI Capital Market Services. “India clearly has a serious problem on its hands and hasn’t done enough to ensure these situations remain a one-off. An exponential increase in investment is required to upgrade the grid.”
State-owned Power Grid Corp. of India Ltd., which operates the world’s largest transmission networks, manages power lines including in the northern and eastern regions. NTPC and billionaire Anil Ambani-controlled Reliance Power Ltd. (RPWR) operate power stations in north India that feed electricity into the national grid. The northern and eastern grids together account for about 40 percent of India’s total electricity generating capacity, according to the Central Electricity Authority.
The grids in the east, north, west and the northeast are interconnected, making them vulnerable, said Jayant Deo, managing director of the Indian Energy Exchange Ltd. The outage has also spread to seven additional states in the northeast, NDTV television channel reported.
“Without a definitive plan by the government to gradually bring the grids back online, this problem could absolutely get worse,” Deo said.
Singh is seeking to secure $400 billion of investment in the power industry in the next five years as he targets an additional 76,000 megawatts in generation by 2017. India has missed every annual target to add electricity production capacity since 1951.
Power cuts are common across swathes of India as the country battles an average 9 percent shortfall in meeting peak power demand that the government says shaves about 1.2 percentage points off annual economic growth.
India’s northern region lost power at around 1:15 p.m. local time today, said Gopal Saxena, CEO of BSES Rajdhani Power Ltd., a distributor for Delhi. NTPC’s 62 generating units with a capacity of 14,000 megawatts stopped producing power as a precaution, its chairman, Choudhury, said by telephone.
Electricity supply to the eastern Indian city of Kolkata was hit, CNN-IBN news channel reported.
“It’s highly embarrassing in that it again shows we can’t provide basic services to our citizens,” said Mohan Guruswamy, chairman of the Centre for Policy Alternatives in New Delhi and a former finance ministry adviser. “It tells you a lot about the quality of management and their focus on maintenance.”
Improving infrastructure, which the World Economic Forum says is a major obstacle to doing business in India, is among the toughest challenges facing Singh as he bids to revive expansion in Asia’s third-largest economy that slid to a nine- year low of 5.3 percent in the first quarter.
Tussles over policy making with allies in the ruling coalition, corruption allegations and defeats in regional elections have weakened Singh’s government since late 2010.
The Reserve Bank of India, which has blamed infrastructure bottlenecks among others for contributing to the nation’s price pressures, today refrained from cutting interest rates even as growth in the $1.8 trillion economy cooled to a nine-year low in the first quarter.
Indian consumer-price inflation was 10.02 percent in June, the fastest among the Group of 20 major economies, while the benchmark wholesale-price measure is more than 7 percent.
The last time the northern grid collapsed was in 2001, leaving homes and businesses without electricity for 12 hours. The Confederation of Indian Industry, the country’s largest association of companies, estimated that blackout cost companies $107.5 million.
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