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Thursday, Jun 09, 2005

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Reforms in power sector paying dividends: Sayeed

T. Ramakrishnan

11 States to start unbundling of electricity boards

P.M. Sayeed

CHENNAI: Though the Centre has extended the deadline by six months for unbundling 11 State Electricity Boards (SEBs), it is expected that the power sector reforms in these States will gather impetus over the next few months.

"All 11 States have expressed their commitment to carry forward the reform process. Jharkhand will restructure its SEB in three months. At the recent State Power Secretaries conference attended by the Prime Minister, West Bengal said it would follow suit in a few months," P.M. Sayeed, Union Power Minister, told The Hindu over phone from New Delhi.

The Centre recently decided to extend the deadline for unbundling the SEBs of Tamil Nadu, Kerala, Punjab, Chhattisgarh, Bihar, Madhya Pradesh, Meghalaya, Himachal Pradesh, West Bengal, Jharkhand and Assam.

Under the Electricity Act of 2003, the SEBs can no longer perform the functions of generation, transmission and distribution together.

The extension has been granted to enable the States to prepare for the reorganisation.

Until now, 14 States have unbundled the SEBs, Maharashtra being the recent addition.

Not privatisation

Mr. Sayeed reiterated that, "unbundling is not synonymous with privatisation. It may encourage privatisation. But the crux of the matter is that it is aimed at ensuring effective working of power stations, enhancement of plant load factors of the stations, reduction of technical and financial losses, and provision of reliable power at an affordable rate."

Claiming that the reforms were "paying dividends," the Minister said it was because of the "relentless and aggressive drive" by the Centre that the trend of losses in the power sector had been "effectively curbed."

The financial losses of the sector rose from Rs. 3,000 crores in 1991-92 to Rs. 30,000 crores in 2000-01. Experts had then anticipated that the losses would increase to Rs. 50,000 crores annually. "But we brought them down to Rs. 21,000 crores during 2004-05," he said.

After the SEBs paid arrears dues, the collection efficiency of public sector undertakings under the control of the Power Ministry had reached 100 per cent last year.

Theft of power

The Minister said the Centre has been urging States to deal sternly with cases of power theft. Nine States enacted anti-theft laws and many States had set up special courts and special police stations.

In the last year, about 12.6 lakh cases of power theft were detected with Andhra Pradesh acounting for 3.4 lakh cases and Tamil Nadu 3.09 lakhs. Madhya Pradesh topped the list with 3.74 lakhs. The accused were convicted in 9,200 cases. "More importantly, a penalty of over Rs. 500 crores was realised through the stringent measures," Mr. Sayeed said. States were told to improve their consumer grievance redressal system and 19 States had set up customer care centres.

The transmission capacity of the country had been further expanded and thanks to the Talcher-Kolar high voltage direct link, about 9,300 million units flowed from the Eastern Region to the South. The frequency of power in the grid was maintained most of the time at an acceptable range of 49 cycles to 50 cycles. "Last year, there was no grid collapse, not even a partial grid collapse," the Minister said.

Rural electrification

Referring to the Government's scheme on rural electrification, Mr. Sayeed said it was aimed at covering unelectrified villages and hamlets.

The Centre would provide a subsidy for 90 per cent of the cost of the project and loan for 10 per cent. Over the next two years, Rs. 5,000 crores would be spent on the scheme and during the 11th Plan period, Rs. 11,000 crores would be set apart for the purpose.

So far, 57,000 villages had been identified. "We will involve non-government organisations, unemployed rural youth and cooperatives in the scheme. We intend to appoint them as franchisees for functions such as providing electricity connection to households and collection of power bills," the Minister said, claiming that 2004-05 was the "high performance year" in the power sector since Independence.

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