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MORE AND BETTER JOBS IN SOUTH ASIA
public and private) as well as electricity traders, who participate in a competitive electricity wholesale market. Nepal and Sri Lanka retain their vertically integrated state-owned company. Countries also have to strengthen institutions in order to efficiently expand capacity. The region has pursued ambitious plans to meet power shortages. In India alone, power sector investments have to increase from about $7 billion a year to about $30– $40 billion a year by 2012, under the 11th Plan, which calls for total investment of $150 billion. Total investment is expected to double to $300 billion under the 12th Plan (2012–17) (Banerji and Mishra 2010). India added 50 GW between 2006 and 2011 and implemented a series of “ultra mega” (4,000 MW) generation projects based on competitive bidding by independent power producers. It also set up a functioning trading market for contracts of less than a year. In 2010/11, the short-term power market constituted 10 percent of the total power procured in India (Central Electricity Regulatory Commission 2011). Bangladesh plans to develop 9,426 MW of new generation capacity by 2015, at an estimated cost of about $15 billion, including associated transmission and distribution investments and fuel development and supply facilities. Bhutan has established publicprivate partnerships and secured financing on commercial terms for a large exportoriented hydropower project (Dagachhu HPP). Between 2008 and 2010, Pakistan added more than 2,000 MW of capacity. It expects to commission 300 MW of hydropower by 2012. Further improvements in the operating environment are needed to increase investments in generation. Generation shortages are caused primarily by procedural bottlenecks (land acquisition, environmental and forest clearances, and provision of water for thermal plants); limited technical and fi nancial capacity to implement large projects; the lack of fuel and the inability to import it; and difficulty in accessing domestic resources (such as coal in India, which lies under forests or in tribal areas, or hydropower in Nepal, the
development of which has been limited by political instability). There is more scope for private players in the transmission and distribution sectors, where investments have been considerably lower than in generation, reflecting the natural monopoly nature of transmission and difficulties in tackling longstanding underpricing and theft in distribution. In India, several public-private partnership contracts have been competitively awarded on a Build, Own, Operate, and Maintain or a Design, Build, Finance, Operate, and Transfer basis. India and Pakistan have also pursued private participation in power distribution as a means of improving the commercial orientation and service delivery. In India, power distribution has been privatized in Delhi and the state of Orissa, and some states, such as Maha rashtra, are developing “franchise” models akin to lease contracts to bring in the private sector. Pakistan privatized distribution in the Karachi Electricity Supply Corporation. The results of these initiatives have been mixed, reflecting the difficulties in moving to and sustaining cost-covering tariffs and reducing nonpayment and theft. Skill mapping and skill development need to appear on top of the business agenda among sector players, as the lack of skilled manpower is emerging as a constraint hindering massive investment. The active participation of private players in the sector has resulted in higher attrition rates from the public sector and steep competition for talent. In India, demand for manpower is expected to increase through 2013/14, when the sector will require an estimated 85,000 additional workers (CRISIL 2011). Exploiting the significant potential of intraregional energy trade Countries need to build on the unexploited potential of interregional trade and improve the efficiency of existing investments, two of the most cost-effective options for alleviating shortages in the region. Interregional trade, particularly hydro exports from Bhutan to India, has increased in recent years. Initiatives continue, with the government