Power Min Cabinet note on 'carriage and content' by month-end

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Ministry of Power will float a Cabinet note on the proposal of disintegrating power supply and distribution network for providing electricity to consumers, in a month's time.

This proposal -- carriage and content -- has been in the works for the past one year and may fructify by the end of the current financial year (2013-14), sources said.

"The deliberations on the carriage and content model are on and by this month-end we will be ready with the note," a Power Ministry official said.

This move is aimed at reducing losses of discoms.

As per the proposed model, there will be a separate power supplier and separate electricity distributor or distributors.

The power network would be owned by one company while the suppliers of electricity could be more than one.

"The power supplier will not manage the distribution network, it will be managed by another firm which will disseminate electricity to the end consumer," the official said.

The model is based on the existing system in the United Kingdom, which has separate suppliers and electricity network providers.

At present, power distribution companies (discoms) supply as well as manage network that provides electricity for residential as well as commercial purposes.

The government has also launched the scheme -- financial restructuring package -- to bailout the distressed power distribution utilities .

The accumulated losses of state power distribution companies were estimated at about Rs 1.9 lakh crore as on March 31, 2011 and Rs 2.46 lakh crore as on March 31, 2012.

As per the scheme, 50% of the outstanding short term liabilities of the discoms, upto March 31, 2012, will be taken over by State Governments.

This shall be converted into bonds to be issued by discoms to participating lenders, duly backed by State Governments guarantee.

The scheme is under implementation in Tamil Nadu, Rajasthan, Uttar Pradesh, Haryana and Himachal Pradesh.