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February 15, 2001
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Money > Reuters > Report February 15, 2001 |
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Government to draw plans for power reforms in statesThe government expects to come out soon with a plan to check losses in power distribution at various levels in states and was willing to fund schemes to implement the reforms, Power Minister Suresh Prabhu said on Wednesday. "In the next few months itself, we are going to prepare a district wise plan, what needs to be done, what are the upgradation that needs to be done (on the distribution front)," Prabhu told the annual session of the Associated Chambers of Commerce and Industry. The power ministry recommended to the cabinet on Tuesday giving priority to reforms in the energy distribution sector to curb transmission and distribution losses and attract private investment. State government utilities are running huge losses largely because of mismanagement and theft in power distribution. According to the power ministry's estimates losses of the state electricity boards had mushroomed to Rs 144.6 billion in 1998-99 from Rs 31.40 billion in 1991-92. Prabhu said that the government was willing to fund the states for undertaking reforms in the power sector. He said the government was signing Memorandum of Understandings with states which agreed to the power reforms in a time bound manner. "The MoUs have clear well defined milestones to bring about reforms," Prabhu said. Most states are yet to usher reforms through privatisation of the state electricity boards (SEBs), which are also the sole distributors of power. The minister said that the northern state of Haryana was the first to sign the MoU and some other states are expected to sign it in the coming weeks. The power minister said states which do not usher power distribution reforms would not get incentives from the central government. "Unless the states are willing to carry out reforms we will not lend any money to them", he said. India's installed generation capacity was 96,950 megawatts on March 31, 2000, and the country needs an additional 100,000 MW over the next decade. A large part of that is expected to be set up by private firms.
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