Govt. will reform power sector: CM

By Our Special Correspondent

BANGALORE, SEPT. 4. The Chief Minister, Mr. S.M. Krishna, said today that the Government was committed to reforms in the power sector.

Addressing the annual general meeting of the Karnataka Power Corporation Limited (KPCL) here, the Chief Minister, who is the KPCL Chairman, said the Karnataka Electricity Regulatory Commission had been functioning well, and had passed several orders of significance to various organisations in the power sector.

Mr. Krishna said the Government had approved a financial restructuring plan for the Karnataka Power Transmission Corporation Limited (KPTCL), which would automatically improve the finances of the KPCL. The KPTCL had to gear up to optimise its revenue collection and pay in full for the power that it purchased from the KPCL, he added.

New projects: The Chief Minister said that with better payment from the KPTCL, the KPCL could hope to implement several new projects for which it had received approvals. The Government had, as on August 31, released Rs. 279 crores to the KPTCL and the KPCL, from out of the first instalment of loan received from the World Bank for the power sector. ``The Government is confident that the KPTCL will raise its standard of performance and live up to the expectations of the people of the State,'' Mr. Krishna added.

He said that the KPCL incurred a loss of Rs. 100 crores in the current year. It had to write off dues of Rs. 344 crores of the KPTCL. ``It was an extraordinary situation necessitated by the need to keep the reforms on course. However, at a very difficult time when the power sector is in transition, financial institutions and commercial banks have come forward to support the development programmes of the KPCL in a big way. The KPCL is grateful to those participating in the investment programmes, including the common man who is contributing by way of deposits,'' he added.

Mr. Krishna said the positive aspect of the KPCL had been the commencement of work on the seventh unit of the Raichur thermal power station. The work was ahead of schedule, and the unit would be commissioned before April 2003. He added that the seventh unit promised to be the most cost-effective project in the country.

The coming year, however, did not augur well for the power sector. The monsoon had failed, and the storage in the hydel reservoirs was poor. That would put pressure on thermal power stations. The KPTCL would also have to consider purchase of power at a higher cost from other producers.

However, the KPCL had resorted to only around seven per cent revision in the power tariff over the last eight years. ``It has absorbed the input cost increases through efficiency in its operations. Despite a projected increase, the average cost of power will not exceed Rs. 1.20 per kilowatt hour,'' he added.

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