State commits itself to power sector reforms

By Our Special Correspondent

NEW DELHI, AUG. 20. Kerala has joined the list of States willing to undertake power sector reforms by signing a memorandum of understanding (MoU) with the Union Power Ministry here today.

As part of the agreement, the Kerala Government has agreed to run its power sector on commercial lines and has also agreed to securities all its dues to the Central public sector undertakings (CPSUs) as per the scheme approved by the Central Government. After the securitisation, the State Government would ensure that CPSU outstanding do not cross the limit of two month's billing.

In return for its commitments, the Centre would provide funds from the Accelerated Power Development Programme (APDP) for renovation and modernisation of thermal and hydro generating units in the State and for improvement of sub-transmission and distribution and metering in the identified circles in the State.

The Centre would also assist Kerala to fully exploit its hydro power potential through development of projects in the State sector and through joint ventures between the State Government and the CPSUs. Additional allocation of power to the State has also been promised from Central generating units through the Powergrid Corporation while the Power Finance Corporation would consider extending financial assistance to Kerala for meeting the financial needs of the power sector by relaxing normal conditionalities relating to exposure limit, the rate of return, etc.

The Kerala Government has also agreed to desegregate the State Electricity Board and make it accountable in respect of each of its principal functions like generation, transmission and distribution with a view to creating independent profit centres by April 2002.

The State would also undertake energy audit by metering of all 11 KV and above feeders by October this year and a time-bound programme for reduction of transmission and distribution losses so as to bring down these losses to 17 per cent by December 2004. The State has also promised 100 per cent metering of all consumers by December 31, 2001.

The State has also promised to reach break-even position by its power utilities by March 31, 2002 and also undertake computerisation of accounting and billing in towns by March next year. An effective programme would be launched for identifying and eliminating power theft in the next two years.

Kerala would also set up an independent State Electricity Regulatory Commission by October this year and file tariff petitions by March 2002, the MoU States.

The MoU was signed here today by the Kerala Chief Secretary, Mr V. Krishnamurthy, and the Union Power Secretary, Mr A. K. Basu.

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Section  : Southern States
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