Southern States
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Kerala
No escape from power reforms: Minister
By Our Special Correspondent
THIRUVANANTHAPURAM, JAN. 24. The Union Minister for Power, Suresh P. Prabhu, has said the States have no other option but to introduce drastic restructuring of their power sectors to ensure financial viability.
Inaugurating a meeting of the State power utilities, organised by the Power Finance Corporation (PFC) at Kovalam near here today, he said the development of the power sector should become the full responsibility of the State Governments, with the Centre playing the role of a facilitator. The Centre's key role in future would be in ensuring financial tie-ups for viable power projects prepared by the States.
The States would have full freedom to choose the pattern of reforms they wished to introduce in their power sectors. There were quite a few patterns from States like Orissa and Kerala which could be copied. The only criteria was that the reforms should deliver.
He said it was quite gratifying to note that 14 State Governments, including Kerala, had already committed themselves to undertake reforms in the power sector with the technical and financial assistance of the PFC. ``I would urge the other States to follow suit,'' he said.
The Union Power Ministry is firming up plans to add 1,00,000 MW of electricity to the generation capacity in the country by the end of the Tenth Five Year Plan to ensure power for all by the year 2012.
``This is indeed a challenging task. What was achieved in five decades so far is sought to be attained in one decade,'' he said.
Mr. Prabhu said that realising this ambition would involve an investment of about Rs. 8,00,000 crores at current price levels. The biggest problem now was the poor financial health of State power utilities. Their commercial losses touched Rs. 24,000 crores during 2000-01. This seriously constrained their ability to invest in new generation capacity and system improvement.
Their dues to Central public sector undertakings, Railways and coal companies were now in the range of Rs. 45,000 crores, thereby eroding the viability of these entities also. The perceived inability of the State power utilities to honour their financial commitments was also preventing private investment in the sector in spite of the liberalisation measures.
He said efforts were being made to increase the allocation for the Accelerated Power Development Programme for the Tenth Plan. The Centre had set apart Rs. 1,000 crores and Rs. 1,500 crores during 2000-01 and 2001-02 respectively for this programme under which the States would be provided with incentives for achieving grassroots reforms in the power sector.
Another important vehicle called the India Power Fund (IPF) would be launched shortly by the Union Government as a platform for mobilising resources to build a corpus of between Rs. 5,000 crores and Rs. 10,000 crores.
Periodic incremental growth was also envisaged for the IPF to facilitate funding by way of loans and equity, according to the specific requirements of the power sector, Mr. Prabhu said.
The Kerala Electricity Minister, Kadavoor Sivadasan, who presided over the inaugural function, said the provisions of the Forest Conservation Act were standing in the way of the development of the power sector in the State.
He wanted the Centre to give its clearance for the proposed hydel schemes at Athirappally, Pooyamkutty, Kuriarkutty and Karappara. He also stressed the importance of speeding up the installation of the proposed LNG terminal at Kochi to ensure the availability of cheaper fuel for the thermal power stations here.
Electricity Board chiefs and power secretaries from all States are attending the two-day conference.
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