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| Govt sets June 30 deadline for unbundling of SEBs |
| Sudheer Pal Singh / New Delhi Apr 17, 2009, 00:55 IST |
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Seven states yet to unbundle their state electricity boards
The government could complete its six-year-old initiative to unbundle state electricity boards (SEBs) into separate entities for power generation, transmission, distribution and trading business by June 30 this year.
The seven states that are yet to unbundle — Kerala, Tamil Nadu, Bihar, Jharkhand, Punjab, Himachal Pradesh and Meghalaya — have been given what is being called a final deadline to unbundle.
“We have given a deadline of June 30 to the remaining seven states for unbundling their state electricity boards (SEBs),” confirmed a senior official from the power ministry.
Though many deadlines have been breached in the past, the official was confident that this date would be kept by the seven states.
This unbundling is mandated by the Electricity Act of 2003 which prohibits SEBs from functioning as integrated power utilities.
Dismissing the notion that the new deadline might be too aggressive for what is essentially a complex political decision, the official said: “They have been getting time since 2003. After the elections, they will have around 45 days to act,” he added.
The procedure for unbundling of an SEB includes transferring of its rights and liabilities to the state government through a “transfer scheme”, followed by its subsequent transfer to a government company.
Many of these states have already taken the initial steps for unbundling.
“Tamil Nadu has already taken a cabinet decision. Bihar and Jharkhand are approaching the cabinet, while Kerala has already published a transfer plan,” said the official.
The employees of SEBs have been generally opposed to unbundling as they fear it would lead to privatisation and subsequent job losses.
There is another reason for opposition to unbundling. “If each function is given to separate companies, it becomes easy to identify who is losing how much money and where. But in an SEB structure, all accounts for transmission and distribution remain common,” said a senior official associated with the Jharkhand SEB.
Jharkhand itself has managed extension of the power ministry’s SEB unbundling deadline several times in the past. This time. however, the state seems to be arriving at a decision.
“PFC Consulting has been advising us in this matter. They have submitted their report for a roadmap which is under consideration of the department,” said a senior official from the state’s energy department.
Experts say unbundling has to be accompanied by internal reforms to make it effective. “Unbundling by itself is no solution. It has to be accompanied by good corporate governance. There are examples of states where even after unbundling, the results have not been satisfactory,” said a senior analyst from an accounting and consulting firm.
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