Naveen seeks PM's intervention on R-APDRP assistance

Frustrated over the inaction of Union power ministry on its demand for financial assistance under the Restructured Accelerated Power Development and Reform Programme (R-APDRP), the Orissa government has now sought Prime Minister Manmohan Singh's intervention on the matter.

Chief Minister Naveen Patnaik has shot off a letter to the Prime Minister urging him to take necessary steps to sanction financial assistance to Central Electricity Supply Utility of Orissa Ltd (Cesu) under the R-APDRP scheme without any further delay.

Stating that by availing R-APDRP assistance many states have substantially reduced the AT&C (aggregate technical & commercial) losses to below 25 per cent, Patnaik said that Orissa was still suffering AT&C loss of about 40 per cent on being deprived of R-APDRP assistance.

He pointed out that Orissa's request to be included under R-APDRP has not been acceded to so far as the scheme in its present form does not cover private utilities.

“Since the Orissa government had undertaken the reform process and transferred the management of distribution to Cesu, North Eastern Electricity Supply Company (Nesco), Southern Electricity Supply Company (Southco) and Western Electricity Supply Company (Wesco), our state has been deprived of assistance under the scheme. This has seriously affected our efforts to strengthen the distribution network to reduce the AT&C losses and provide quality power to the people of the state”, Patnaik said in the letter to the Prime Minister.

The Union ministry of power is implementing the R-APDRP during the 11th Plan as a Central sector scheme with the objective of upgrading the sub-transmission and distribution network, including energy accounting and metering in the urban areas having population of more than 30,000. However, this assistance is not available to private utilities.As part of the reforms process, the Orissa government unbundled the erstwhile Orissa State Electricity Board (OSEB) by structural separation and corporatisation of generation, transmission and distribution.

Fifty one per cent of OSEB's shares were transferred to four distribution companies- Cesu, Nesco, Wesco and Southco.

The reforms were carried out with the assumption that substantial investment in capital works coupled with investment in working capital under the regulatory mechanism of the Orissa Electricity Regulatory Commission (OERC) would result in reduction of AT&C losses. Initially assisted by the World Bank and UK-based Department of International Development (DFID), Orissa took the initiative and became the pioneer state to reform the electricity sector.However, the World Bank stopped financing capital projects midway and the distribution companies could not mobilize investment as a result of which the objective of substantial reduction of AT&C losses could not be achieved.