Bses Chief Advocates Licensee Route For Sebs

State Electricity Boards can achieve faster progress in power sector reforms if they follow the licensee route rather than the World Bank approach, BSES chairman R V Shahi said yesterday.

Speaking to the press at a conference on the centenary celebrations of the Indian thermal power sector, Shahi said the licensee route of introducing the private sector in power distribution will yield quicker results than the World Bank model.

He said while the World Bank model requires structural and institutional changes in the state, the licensee route requires no major changes.

He said the licensee route adopted by the Rajasthan government is better than the World Bank model adopted by Orissa.

Though the Rajasthan government has delayed the bids for privatising power distribution, he said the state will not, unlike the Orissa government, face problems implementing reforms in the state power sector.

The Orissa government was forced to change its approach from management contract to hiving off 51 per cent stake in distribution zones to the private sector after it faced stiff resistance from trade unions.

The Rajasthan government, however, decided to divide the state into zones and then invite the private sector for operating the zones as licensees, as prescribed under the Act of 1910.

The private operator is guided by the norms under the said Act.

The operator can hold stake of 51 per cent to 100 per cent for a given period. This period which is initially 30 years can be extended by the state government.

BSES, along with the Ahmedabad Electric Supply and Calcutta Electric Supply are private companies that are operating as licensees and are supplying electricity in Mumbai, Ahmedabad and Calcutta respectively.

Power distribution in other cities is handled either by the electricity boards or undertakings.