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Wednesday, May 26, 2004

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States can provide free power: P.M. Sayeed

By Our Special Correspondent

NEW DELHI, MAY 25. The Union Minister for Power, P. M. Sayeed, today said that State Governments could provide free power to any consumer segment, provided they make allowance for it in their budgets.

Mr. Sayeed told journalists here that the Electricity Act, 2003 provided for the supply of free power as long as generation and supply companies were compensated.

"The States can make provision in their budgets and provide free power to any segment of the consumers,'' he said. He was responding to questions relating to the rollback of power reforms by States such as Andhra Pradesh and Tamil Nadu, which had now restored free power supply.

On stepping up public investment in the power sector, as has been promised by the United Progressive Alliance (UPA) Government, the Minister said that in the Tenth Plan, 23,000 MW was being commissioned in the Central sector and 11,000 MW in the State sector; only 7,000 MW was being set up in the private sector. The total additional power generation target was 41,000 MW.

On the demand of some of the UPA allies that the recently passed Electricity Act be reviewed, Mr. Sayeed said there was no need to do so at the moment.

The Electricity Act, 2003 contemplates the efficient development of the power sector in a competitive environment, including restructuring of the vertically integrated State Electricity Boards to bring about greater accountability, transparency in provision of subsidy and introduction of competition through open access in transmission, he said.

Outlining his Ministry's priorities, he said rural electrification would be the focus; effective measures would be put in place to provide electricity to households that do not have access to power, which is nearly 56 per cent rural households in the country at present.

On the Dabhol power plant problem, Mr. Sayeed said he would wait for the Naresh Chandra Committee report before commenting on it.

He, however, added that the Government would do whatever was necessary to resolve the issue.

The Minister also announced that full support would be given to private power companies for expediting financial closure (tying up their funds requirement) by June this year. Proposals for generating 8,000 MW are awaiting financial closure, he said.

Mr. Sayeed said that a national electricity policy, power tariff policy, rural electrification policy and a policy on competitive bidding would be announced in a time-bound manner to ensure speedy implementation of the Electricity Act, 2003.

In addition, a national-level appellate tribunal would be set up, as required under the Electricity Act, Mr. Sayeed said.

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