'Andhra needs no support to second gen power reforms'

Though the World Bank sees expanding scope for the private power sector in Indian in the post reform scenario, it now feels that privatisation alone is not a panacea to the problems and issues faced by it in the light of experiences in Orissa and Andhra Pradesh, according to Salman Zaheer, lead energy specialist of the bank.

Armed with vast exposure to the issues facing the power sector and the recent experiences the world over, the bank now wants to don a purely advisory role to help governments improve the performance of the power sector, he said at a recent workshop here.

According to Salman Zaheer, the Left-front government in West Bengal has already asked the World Bank to provide advisory services to help improve its power sector even as the Andhra Pradesh government is hesitant to take any fresh loans from it for the power sector owing to public resentment against the bank-assisted reforms.

"So far no request has come from the AP government for any assistance relating to the power sector. However, the government has sought a loan of about $ 1 billion for irrigation projects," he told the media.

He said the reforms helped improve power system, especially in unbundling of operations into generation, transmission and distribution enabling greater accountability and transparency.

When asked about the World Bank's possible association with the state power sector, Zaheer said there was no need to continued support to the state in maintaining second generation reforms.

He said the public private partnership model was a better suitable way out to overcome the problems in the sector. However, he cautioned that without reforms the country could not meet investment targets being set on the basis of future power demand projections.

According to him, redefining domestic tariffs above life-line level was necessary to rationalise cross-subsidisation as well as to improve revenues of power utilities.

While the World Bank's focus is expected to shift back to the power sector, especially to support new capacity additions of hydel generation, it is also looking forward to playing its part in the implementation of the Government of India's Rajiv Gandhi rural electrification programme, according to Zaheer. With regard to budget support loans, he, however said the agenda was open.

The World Bank funding to India this year is expected to go up to $ 2.5-$3 billion from the present $1.5 billion, according to him.