Vital need for reform in T & D system

By Our Special Correspondent

CHENNAI, NOV. 29. Reform of the transmission and distribution system is vital to restore health to the power sector as a whole, the Union Minister for Power, Mr. N. Suresh Prabhu, observed today.

Inaugurating (through video conference facility from Delhi) the fourth Energy Summit organised here by the Confederation of Indian Industry-Southern Region (CII-SR), Mr. Prabhu said the reform of the power sector should have been started from the T and D segment. Now that the reform process had gone ahead starting with the generation sector, measures should be taken to rectify at the earliest weaknesses in the transmission and distribution system which had led to losses of Rs. 50,000 crores.

Even if the electricity boards did not achieve the minimum return of three per cent on net worth stipulated in law, they should at least be in a position to arrest further losses. It was the boards' poor financial health which had inhibited their capacity to make new investments, he pointed out.

Emphasising the need to reduce the cost of power to enable Indian industry to achieve competitiveness in the era of globalisation, Mr. Prabhu also called for proper projection of demand for power. He said integration of information technology (IT) with the country's economy was expected to increase the demand for power. ``We should avoid a series crisis (of power shortage) which seems to be brewing'', he remarked.

Emphasising the need to attend to environmental concerns, Mr. Prabhu said the objective of power generation was to improve the quality of life of the people. This objective would be defeated if the environmental issues were neglected. Technology and financial support were needed to take care of environmental problems. Also, the ``huge potential'' of renewable energy sources should be exploited, in which the private sector should play a role, he added.

Mr. Arcot Veerasamy, Tamil Nadu Minister for Electricity and Health, said with the expected addition of 979 MW from several projects in the State in the next few months, Tamil Nadu, would be free from power cuts in the summer of 2001. He highlighted Tamil Nadu's premier position in wind power generation and bagasse-based co-generation, besides the scheme introduced by the Tamil Nadu Electricity Board (TNEB) recently for expeditious and time-bound sanction of service connections for industrial, commercial and domestic consumers.

Mr. R. Seshasayee, Chairman, Energy Summit 2000, said ``capable and willing sellers (of power) on one side and capable and willing buyers on the other'' were essential for development of the power sector, and the question of user charges was central to the problem.

Mr. Anil Kumar V. Eapur, Chairman, CII-SR, said the Green Business Centre being set up by the CII at Hyderabad would become operational by the middle of next year.

Mr. Shaktikanta Das, Secretary-Industry, Government of Tamil Nadu, said the so-called dumping by China might actually be a case of highly competitive pricing as a result, among other things, of low power and infrastructure cost and wage cost for manufacturers in that country, since no industry could afford to take losses over the long term.

Later, Mr. Das inaugurated the four-day exhibition being organised as part of the Energy Summit at the Raja Muthiah and Rani Meyyammai Halls.

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