Sivasubramanian Natrajan, Managing Director, ThyssenKrupp Industries India is an eternal optimist who believes that things are looking up for the power sector in the country. Slightly surprised at the big names missing and the subdued response to the Power-Gen India exhibition, he tells Power Today that it´s a qualitative response that was received, rather than a quantitative one.
How do you perceive the current industry scenario and how do you see it shaping up in the times to come? I am an eternal optimist and certainly the space in the industry is very large. Even considering the number of players that we have, it is a very large space and there are promising prospects in the industry. Whatever we see today is more of a transient phenomena that we did go through in the last 3-4 years, a big tip in the sentiments of the market. But otherwise I am still very confident that things will pick up. Power is a major driver for the high aspirations of the citizens of the country and I very firmly believe that it should grow. We should see about 50000-60000 MW of power being added every year in the coming Five-Year Plan.
But the pace of the reforms has left a lot to be desired... Yes, the government instead of enabling the power sector, was creating more challenges for it. And if they remove those challenges, the industry will grow.
What are the issues plaguing the power sector? There are two main issues: one is land issue as land prices have gone up ridiculously. People who have small pieces of land, they have acquired 98 per cent of it and remaining 2 per cent they are not able to acquire. So these issues are more politically focused. If they make the focus more objective and transparent, things will improve. Secondly, banks who have been financing the sector, they have been less empowered. So the business managers of the banks are not able to take the decisions. Everything has to go back to the bureaucratic cycles. Apart from this, the industry is set for a big term.
Our company focuses more on thermal power and thermal industry is dependent on coal, which is a big bottleneck. With so much of coal in reserves, it´s impractical that we import so much of coal. Instead of importing coal, why can´t we upscale our mining facilitates too? But the biggest issue that is coming today is water. If that is not resolved, it´s going to be a major problem. The government has to really step in and say now I want to enable this industry because this is the industry which is going to give the future driver for growth of the Indian economy. They have to believe that and start enabling the industry rather than create more stumbling blocks for the industry.
What are your suggestions for the upcoming government, especially for the mining sector? The government needs to understand the requirements of the industry and act accordingly. Everyone talks about the super thermal power plant or ultra-mega power plant. But according to me that´s not the real solution for India. India should look at a scenario that it creates the power at the location where power is needed rather than creating power somewhere else and transporting it thousands of miles. The question that needs to be asked is, do you have the infrastructure to build the power plant where it is needed? India has a huge coastline. Is it possible to create smaller power plants, pockets of them and then efficiently generate power in smaller scale? Also, for a country with so much of coal reserve, the quality of coal is bad with huge ash content. So if we have a technology which can cater to this poor quality coal, I think that´s where the solution lies. And this is where Thyssenkrupp comes into big play.
What initiatives need to be taken to give the required impetus to this market in the country? The Indian power sector is one of the most diversified in the world. The demand for electricity in the country has been growing at a rapid rate and is expected to grow further in the years to come. The growth in energy demand in India would be the highest among all countries by 2030-35, beating even China, according to the 2014 energy outlook report by British oil giant BP.
Hence in order to meet this increasing demand, there is need for government intervention to help the economy brace up to be able to handle increased power requirement. This would include increased focus and investments on infrastructure development and its maintenance and at the same time speed up the process of project clearances. The regulators need to promote technologies that are environment friendly and sustainable with the quality of coal reserves that we have in India.
What is your business outlook for the coming year? We are very positive this year. Last year was not so good for us but we have seen better signals this year. The order position for this year is far better and we expect the next year to have a decent growth of 15-20 per cent.
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