Shape up or ship out: Maharashtra

The Maharashtra government has asked state-owned power companies to gear up for competition from the private sector.

State power minister Ajit Pawar has told the MahaVitaran, MahaGenco and MahaTransco to upgrade infrastructure to meet challenge of another 25,000 Mw, spread the network quickly, cover uncovered areas, separate out feeders and improve efficiency in providing quality service to customers. Pawar’s message is crucial, especially when the state’s power demand, which has reached at 14,000 Mw, is expected to increase to 19,000 Mw. The power shortage is also expected to rise to 10,000 Mw from the present 5,000 Mw.

“Currently, MahaGenco is engaged in a capacity addition of 6,000 Mw, while another 4,000 Mw is expected to be met by the private sector. Moreover, by 2012 the network that carries 14,000 MW would carry 24,000 Mw,” an official told Business Standard.

The official said the chance of opening up of the market is evident to provide choice to consumers. “This trend is visible in Mumbai, where consumers of Reliance Infrastructure are shifting to Tata Power and vice-versa. This will be a possibility in areas where MahaVitaran operates. So, it needs to be more vigilant, while providing new connections and faster response to complaints.”

MahaVitaran managing director Ajoy Mehta admitted that state-run companies cannot be complacent and should be prepared for more competition from the private sector. “Competitive distribution will come. Open access will move from transmission to distribution. More privatisation of localised services.” Besides, Mehta said, state-run companies would have to take on the private sector’s generation-distribution consortium.

Mehta said state-run companies would continue to operate but they would have to increase the use of information communication technology in managing their networks, billing and other consumer services. “Fundamentally, consumers and staff interface needs to increase with the help of technology,” he added. As far as regulatory challenges are concerned, Mehta said, there would be more regulations on standards of performance. “Power regulators will keep on demanding more and more details with regard to expenses on power purchases and coal purchase vouchers. There is a possibility that litigation would shift from grievance redressal to loss compensation and in such a scenario financial implications of legal cases would be huge.”