The Hindu : Maharashtra to initiate power reforms

Online edition of India's National Newspaper
Thursday, Aug 29, 2002

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Maharashtra to initiate power reforms

By Mahesh Vijapurkar

MUMBAI Aug. 28. Since financers for building power capacities insist on reforms, Maharashtra plans to set up a group of non-governmental experts to give thrust to reforms. The decision was taken at today's Cabinet meeting, with the knowledge that if left to Government, the reforms would not be in place.

The process of reforms in the power sector would be initiated in the current financial year, and would continue for the next five years.

The Cabinet also adopted a white paper on power sector reforms and released it for public debate. Already, the document incorporates views of the public. An estimated Rs. 30,475 crores is needed in the next 10 years to add to generation and improvement of transmission and distribution.

The white paper recommends various reforms to promote the development of an efficient, commercially viable and competitive energy sector to provide reliable, quality and uninterrupted supply at reasonable prices.

After the Enron-sponsored Dabhol Power Company is kept off, power capacity has not gone up. A load-shedding of up to 2,000 MW a day is required at peak time. Unbundling and privatisation are seen as remedies. But the Maharashtra Government does not like to give up the distribution sector, though it is keen on incorporating "the lessons learnt from Orissa and the unfolding Delhi experiences''.

While the industry wants the Government to end monopoly in the power sector, consumer organisations and NGOs feel that unbundling and internal reforms in the Maharashtra State Electricity Board are enough.

The white paper says the MSEB has not realised dues and is starved of funds even to buy meters on the other. Fifteen per cent of consumers do not have meters. Maharashtra's installed capacity comprises 9,771 MW with the MSEB, 1,774 MW with Tatas and BSES and a share of 2,375 MW from the Centre apart from a captive capacity of 641 MW.

The white paper admits that the average gap between cost of power and revenue realisation has increased from 51 paise a kwh in 1999-2000 to 73 paise in 2000-2001 and its current receivables are a whopping Rs. 7,114 crores equivalent to seven months' sales. Of this, Rs. 5,226 crores has been outstanding for more than a year.

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