India restores power, promises action

India has restored its power supplies after two days of outages that blacked out half the country, but fears remained that the grid could collapse again under the strain of excess demand.

"The most important task on hand for me is to take essential steps required to sustain the electricity grid that suffered unprecedented failure over the past two days," said new Power Minister Veerappa Moily on Wednesday.

Despite his promises that the outage would "not be repeated", wary people who are used to regular load-shedding were braced for the possibility of more serious disruption.

Hundreds of miners were trapped underground for hours in the eastern states of West Bengal and Jharkhand on Tuesday, metro services were stopped in the capital New Delhi and hundreds of trains were held up nationwide.

Traffic snarled in cities as traffic lights failed and hospitals and airports had to switch to back-up power.

"On Monday the government said that this will never happen again but on Tuesday they proved themselves wrong. How can you trust them anymore?" said Revathi Nair, a 32-year-old manager of a five-star hotel in central Delhi.

Former power minister Sushilkumar Shinde, who was promoted to home minister on Tuesday in a reshuffle announced in the midst of the crisis, said India should be more grateful for the efforts of its engineers and bureaucrats.

"Where in America the grid doesn't get repaired for four days, here we repair the grid in several hours," the minister told reporters, repeating a boast that India had been more reactive than the US, which suffered a huge power failure in 2003.

"You should appreciate us, the way work is done in the power ministry," he added.

Wednesday's newspapers were predictably critical of the government, saying it lacked the political will to implement reforms in the power sector to boost production and sort out near-bankrupt state distributors.

Powerless and Clueless, ran the front-page headline in the Times of India, while the Economic Times splashed with Superpower India, RIP in a reference to New Delhi's bid to be recognised as a global economic and diplomatic force.

On the streets of Delhi, small business owners seethed over the failures which caused computers to crash and generators using expensive diesel to be called into action.

"I spent over 2000 rupees (about A38) yesterday just to buy diesel for my generator," said Ram Prasad Kejriwal, who runs a shop selling shawls on a commercial street in the capital. "The entire day's sale was only 5000 rupees."

Business lobby group the Confederation of Indian Industry (CII) estimated the losses to small and large business in billions of rupees and said India's investment image abroad had taken a major hit.

The repeated outages "carry a very negative image of India, when already sentiments about the country are low on account of the current economic situation", CII director general Chandrajit Banerjee said in a statement.

According to senior ministry officials, the two successive days of grid failure were triggered by energy-hungry states drawing power beyond their allocated limits.

"We're facing power problems of Himalayan proportions," said Ajay Bodke, strategist at leading Indian investment house Prabhudas Lilladher. "Reforms can't wait any longer - this is a wake-up call for immediate measures."

Analysts say the power ministry needs to get state electricity boards to abide by their power quotas and manage distribution efficiently to avoid demand crunches.

The finances of the distribution companies also need fixing by raising prices and cracking down on theft, which would allow them to invest more in their strained networks, they said.

Coal shortages are at the root of many of the problems because of the inefficiency of state-run giant Coal India Ltd, which is struggling to increase its production to meet the demand from power stations.

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