Delhi Model For Kesco Privatisation Favoured

Despite efforts, the Kanpur Electricity Supply Company (Kesco) has not been able to attract private sector buyers.

R V Shahi, Union power secretary, talking to journalists on the issue, said Kesco could be sold if the Delhi model was adopted, that is, with the buyer given financial support for several years.

Shahi claimed that the accelerated power distribution and reform programme programme had been successful. It has been implemented in 350 towns, and will be expanded for three years.

States like West Bengal, Andhra Pradesh, Karnataka and Madhya Pradesh have brought out anti-theft legislation, and the move has been successful in West Bengal and Andhra Pradesh.

 

Madhya Pradesh, Punjab and Tamil Nadu have introduced agricultural tariffs, and plan to achieve 90 per cent metering at the 11 kv level.

Twenty two states have already established their electricity regulatory commissions.

The Uttar Pradesh Power Corporation, always defaulting in its payments to the central power generation companies, has also started paying up regularly.

The implementation of the accelerated power distribution and reform programme programme will also help states in coming out of their cash-strapped situation in the Tenth Plan.

In the Tenth Five-Year Plan, the new power generation capacity will largely come from the public sector, with the private sector playing a minor role.

Shahi told journalists that of the new capacity planned to be added (41,000 mw), only 7,000 mw will come from the private sector, and the rest from central and state public sector units.

Shahi said this capacity was more than what was created in the course of the last two Five-Year Plans, when the increase effected was 35,000 mw.

When asked why the private sector had not come forward, Shahi said the initial process of privatisation was wrong. The private sector generation plants were supposed to sell power to the state utilities involved with distribution.

The state units' finances were in a bad state and they could not be relied on to pay their bills, Shahi pointed out. Therefore, the private sector cried off.

It is being done in the right manner at present, he said. First we are privatising distribution, and only then are we moving in to privatise generation, Shahi said.

Another factor which had to be kept in mind was that there had to be a transitional period in which the private sector would have to be supported, he said.

Shahi pointed out three things that have to be done: first, an intensive effort to reduce technical losses and those arising out of theft; 100 per cent metering, billing and collection, which will take at least four years; reducing cross-subsidisation gradually so that the difference between the highest and the lowest tariff is reduced.