Date:16/07/2004 URL: http://www.thehindubusinessline.com/2004/07/16/stories/2004071602731900.htm

Back AP Govt plans Rs 5,000-cr farm power distribution network

Our Bureau

Hyderabad , July 15

THE State Government is planning a Rs 5,000-crore High Voltage Distribution System (HVDS) for agricultural pump sets in rural areas and is working on finalising modalities to fund this project.

The Principal Secretary-Energy and Chairman and Managing Director of AP Genco, Mr D.K. Panwar, said that the State Government has sent in a proposal to the Centre and is exploring various avenues to raise the finances. It would help streamline and cut down transmission and distribution losses. The LIC has agreed to part fund this project.

Addressing a press conference here on Thursday, Mr Panwar said, "It is estimated that annual benefits from implementation of this system are likely to be about Rs 1,200 crore on a recurring basis. The average payback period for this investment is estimated to be around four years. The Government of India would part support this project under the Accelerated Power Development Programme''.

With regard to the proposals under the Electricity Act, 2003, Mr Panwar said that the State Government, after detailed analysis, including the consideration of the Andhra Pradesh Electricity Regulatory Commission's opinion and the Andhra Pradesh Transmission Corporation, submitted a proposal to the Government for full allocation of power purchase agreements directly to discoms. The State Government has accepted the proposals and directed further action.

Meanwhile, with the Government extending deadline by one year, efforts have been initiated to take up the process further. "We are also evaluating the model adopted by Rajasthan which has taken a few more initiatives in this regard," he said.

"This change in process is necessary as the new enactment stipulates that every State follows this guideline. The move is aimed at bringing about an efficient mechanism for service delivery and power is supplied at affordable prices," he said.

With regard to the Government plans to revise the power purchase agreements with independent power producers, a mechanism to address this process is being charted out. Such an exercise is carried out in several countries that have undertaken power sector reforms and also in other States like Gujarat. "Even if this means legal course, we would go ahead," Mr Panwar said.

The Andhra Pradesh Chief Minister, Dr Y.S. Rajasekara Reddy, had recently announced that the Government would renegotiate PPAs with GVK, Jegurupadu, Spectrum plant and Lanco power projects, all gas based IPPs. It is felt that the savings thus brought about through such renegotiations could well be deployed in the free power announced by the Government to the farm sector.