Stage set for constitution of Assam Power Corporation

GUWAHATI, March 17: The stage is set for constituting an Assam Power Corporation for carrying out the generation and transmission functions of the Assam State Electricity Board (ASEB) under the Power Sector Reforms Programme. The State Cabinet recently approved the draft memorandum of understanding (MoU), to be signed with the Ministry of Power, Government of India, for power sector reforms in Assam. As per the draft MoU, after the setting up of the Assam Power Corporation, subsequently the generation part would be separated into one or more companies. According to the MoU, two distribution companies would be set up and selective urban areas might be leased out to private entrepreneurs. One Assam Rural Electrification Corporation will be set up for taking up capital investment in the rural areas from Plan funds. The draft MoU also says that the Government will appoint the chairman and members of the State Electricity Regulatory Commission by April 30 and the Commission will start operating by June 30. The state government will also extend its full support to the Commission. The state government will further start energy audit to reduce loss in a timebound programme, which includes installation of metres at 11 KV feeders by July 31, hundred per cent metering of all consumers by December and online billing at all major towns through computerisation by March 31, 2002. The draft MoU added "The Government of Assam will take measures including rationalisation of existing manpower, restricting recruitment to only need-based to reduce cost of supply of power, levels of the ASEB's receivables to be brought down to 60 days billing by March 2002, Assam will maintain great discipline, comply with grid code and carry out the directions of the Regional Load Despatch Centre, the Government of Assam will securitise the outstanding dues of the CPSUs as per the scheme approved by the Government of India." The Ministry of Power will extend its help to the Assam Government to carry on the reforms programme. The Ministry will supply additional power out of the unallocated Central pool and extend financial support through the Accelerated Power Development Programme (APDP) to execute schemes like strengthening of transmission and distribution system in identified areas and to take up renovation and modernisation of the thermal plants. The Ministry has assured to help the state government in raising funds from the financial institutions for carrying forward the reforms programmes. The draft MoU further said that the Ministry would also provide technical support to the State for studies of system loss reduction programme and to strengthen and improve the inter-state transmission lines. The Centre will also assist the State in exploiting its hydro-power potential through projects in the State sector as well as in the joint venture of the government and the CPSUs. The implementation of the MoU will be monitored every three months and the support from the Government of India will depend on the achievement of the reforms programme. Meanwhile, official sources said that Karnataka, Uttar Pradesh and Madhya Pradesh have already signed the MoU with the Union government for the Power sector reforms, and "now the Centre is asking the other States to follow suit." The Centre has also made it clear that in order to receive financial support under APDP, the state government must sign the MoU with the Ministry of Power. Sources revealed that the Ministry of Power has earmarked a corpus of Rs one thousand crore. Under APDP for the current financial year, while from the next financial year, the corpus fund would be about Rs 3000 crore per year. Sources added that the ASEB has already forwarded a number of proposals to receive financial assistance under APDP, which include an energy audit and a time-bound metering scheme for all consumers. The Department of Power, Government of Assam, on the other hand, clarified that though the ASEB has embarked on the path of reforms and restructuring and is striving to cut down the transmission and distribution loss and enhance the plant load factor, it would not be possible for the Boad to clear all its dues from its own resources without the help of the State government. The Power Department pointed out that the ASEB could not charge "rational and remunerative tariff" as it had to come to the Government before hiking the tariff. However, this lacuna would be addressed once the Assam Electricity Regularity Commission is formed, power Department sources said. The ASEB still owes about Rs 2500 crore as subvention from the Government of Assam. The Power Department sources also pointed out that recruitments in the ASEB cannot be totally banned as need-based recruitment would have to be carried out to fill up important posts. Sources also admitted that the ASEB does not have enough field staff like line-men, metre readers etc, while it has excess of clerical staff like LDAs and UDAs. Mentionably, in a letter to the Chief Minister, Prafulla Kumar Mahanta, the Union Power Minister, Suresh P Prabhu, stressed the immediate need for carrying out reform in the State Power sector to improve the power scenario in the country. He said that the MoUs on power sector reforms would be State specific with the objective of achieving commercial viability "so that we are able to provide electricity to all at affordable rates within this decade." Giving an account of the overall power scanario in the country, the Union Power Minister admitted that the country was facing shortage of power and also that the power cuts seriously affected national productivity. He revealed that the per capita power consumption in India is only 348 units compared to 750 units in China. He said that in order to meet the full demand of power by 2012, the country needs to add 1,00,000 MW of additional generating capacity.