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Cabinet to take up reforms package for power distribution

NEW DELHI: Responding to Prime Minister Manmohan Singh’s call for pro-active action in the power sector, the Power Ministry will soon put up before the Union Cabinet a Rs. 51,000-crore reforms package aimed at making purposeful investment in the distribution segment.

The new package will form part of the new and restructured Accelerated Power Development Reforms Programme (APDRP).The new look APDRP comes after directions from Dr. Singh during the chief ministers’ conference on power held in May last year where he asked the ministry officials to draw up a new re-package result oriented APDRP to ensure that the challenges posed in the XI Plan were met adequately.

Sources said the new look APDRP would have an outlay of around Rs. 51,000 crore and was waiting for a final nod from the Expenditure Finance Committee.

The new plan had been drawn up after holding extensive discussions with the States and various ministries and would offer incentives for achieving various targets.

The new scheme would have two components.

The first would be for creating an information technology backbone for ensuring energy accounting and management and the second component would be for providing funds for system improvement.

The sources said that initially the funds would be given as loan. The first component would be converted to grant subject to third party verification.

The second component would be convertible to grant depending on the achievement of predetermined milestones assessed over five years. The Planning Commission has made it clear to the Power Ministry that adequate investment was not being made in distribution segment as States did not have the funds for investment and were looking for funding from the Union Government.

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