CHENNAI: Tamil Nadu's appeal for allowing States to have their own schedules for implementing power sector reforms at the Chief Ministers' conference early this week has again brought to the fore the question of re-organisation of the State Electricity Boards.

According to the Electricity Act, the SEBs are not allowed to retain their existing monolithic character of power production, transmission and distribution. However, under a clause of the Act, the Centre grants extension of deadline to States in response to the latter's request. Now, what Tamil Nadu seeks to convey through its appeal at the Chief Ministers' meet is that re-organisation should not be mandatory but advisory. And, this was not the first time that the State had made such a suggestion. Six months ago, at the Power Ministers' conference too, Electricity Minister Arcot N. Veerasamy articulated the position.

TNEB's strengths

The State has based its stand on the strengths of the Tamil Nadu Electricity Board (TNEB). As pointed out in the address of the Chief Minister M. Karunanidhi, its transmission and distribution losses of 18 per cent and billing and collection efficiency at 99 per cent are among the best indicators in the entire sector. Under such circumstances, where is the need for re-organisation or, to put it in the parlance of the power sector, unbundling? High-performing States should not be clubbed with poor-performing States. That's how Tamil Nadu's argument goes.

However, critics see it differently. R.V. Shahi, who was the Union Power Secretary till January, says the TNEB had not been able to generate surplus. This came in the way of the Board making capacity addition and improving the transmission and distribution systems for years. Tariff rationalisation is a major issue of concern to the TNEB, he says.

Conceding that power theft and poor billing and collection are not relevant in the case of Tamil Nadu, Mr. Shahi says these two features alone do not make the TNEB a high-performing utility.

Pointing out that the Centre has been cooperative with the State in allowing the extension of the deadline, the former Power Secretary says that it is up to the State to introspectwhether it is in its interests to go in for early re-organisation of the Board or not.

Andhra Pradesh case

Citing the study of the Indian Institute of Public Administration on the impact of restructuring of the SEBs, he says Andhra Pradesh has done well after adopting the reform path.

He also concurs with the view that a mere re-organisation of the Boards is not sufficient. This has to be followed by a number of measures such as having the right men at the right places and allowing functional autonomy to the newly created bodies.

An official of the Tamil Nadu Government says that what Andhra Pradesh has done on the power front after re-organisation has been achieved by Tamil Nadu even while retaining its original character. The TNEB's recent pact with the Rural Electrification Corporation for a Rs. 16,000-crore financial assistance will take care of its fund requirement for future projects. So, resources are not a problem, says the official.

Some other reasons are also adduced in favour of status quo. When it comes to sectors such as power, the State cannot withdraw itself.

In times of emergency such as tsunami or floods, the Government or its agency can muster enormous resources quickly and tackle the situation.

Immediately after the tsunami of December 2004, the TNEB spent to the tune of Rs. 15 crore-Rs. 20 crore for restoration works in the affected areas. A number of factors have to be taken into account while deciding on the reorganisation issue, the official adds.

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