Letters: Old wine in new bottle

Apropos the editorial, "Beyond UDAY" (November 8), the National Democratic Alliance government has prepared a financial bailout plan to make up for the losses suffered by state power distribution companies. The government claims that this plan is not a populist measure like the bailout packages announced by the previous governments - it is different in nature. The United Progressive Alliance government preceding the present NDA government had, in fact, prepared a similar financial restructuring plan for the discoms and linked it to various performance-related parameters. Some of the states opted for that plan, but in the absence of a mechanism to monitor their performances, it failed.

The solution is technically obvious, but politically challenging. The ruling party in a state might agree to the terms and conditions of the plan now, but this might be difficult to implement in the absence of political will. For a politician, votes are more important than reforms and state governments may still shy away from rewriting the contract on power supply and tariffs.

Every politician and bureaucrat has a different solution to the problems being faced by the power sector. But no one is interested in engaging power engineers to discuss and solve the problems. It is the power engineers, who have to implement the decisions taken by the government.

Not just debt, but operational inefficiencies and deficient regulatory practices of utilities have been inherited over many years. Repackaging the debt was necessary to improve the finances and cash flows of discoms. But without a credible action plan addressing the operational and regulatory practices aspects, the underlying problem remains.

The million dollar question is: can the government erase the discoms' losses by 2019? The future of the NDA government hinges on the reforms it implements to save the power sector.

V K Gupta, Sydney

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