Enron In Talks With Ktpcl For Optic Network

Energy and telecom major, Enron Corporation is in talks with the state electricity board, the Karnataka Power Transmission Corporation Ltd (KPTCL), to set up a fibre optical network across the state at a cost of Rs 500 crore.

A state government official told Business Standard that Enron has sought right of way from KPTCL for laying the network through the maze of electric poles. "It could either be through a joint venture or through lease," the state government official said.

He said the proposal from Enron comes at a time when even KPTCL was keen to enter the telecom sector. "There are enough reasons for the project to get the clearance," he said.

 

Among the others who are planning to set up the fibre optic projects in Karnataka are BPL, Reliance and Lucent Technologies.

KPTCL is in the midst of reforms and in the process of unbundling. The electricity board has sought a whopping Rs 9,400 crore as support from the government for carrying out its restructuring operations.

The financial restructuring group set up by the state electricity board, has in its report stated that as part of the power sector reforms, the total cash support required by KPTCL from 2000-2001 till 2004-2005 (five-year period) will be around Rs 9,400 crore which includes a subsidy component of around Rs 7,500 crore and around Rs 435 crore for creating a pension trust, a state government official told Business Standard.

The group has also suggested offering stock options to the employees of the state electricity board for increasing the productiveness of the staff in the reform process.

The group in its report has stated that a major financial restructuring plan is necessary to get the new entities to kickstart their operations on a sound financial note. This includes restructuring of balance sheet through write off of irrovocable dues, provisioning for doubtful debts, conversion of unfunded liabilities into funded liabilities and proposing a suitable mechanism to clear the debt and overdue current liabilities.

The group stated that the state government's commitment towards power sector reforms should be reflected through cash support requirements so that necessary resources can be raised by the utilities. The electricity board also plans to privatise distribution and offer 51 per cent stake to a private sector partner and around 15 per cent to its employees.

The date for privatising the distribution sector has been set for year 2001, according to sources in the state government. Sources said out of the remaining 49 per cent, around 15 per cent will be offered to the employees of KPTCL and the rest to the financial institutions. The transmission and distribution is expected to be unbundled by December 2000.

Privatisation of the distribution sector is part of the reforms undertaken by the state government to reduce losses and increase efficiency in the sector. According to KPTCL, distribution losses amount to 3,400 MUs every year which is around 15 per cent of the energy handled. The commercial losses in both the transmission and distribution sectors have been attributed to defective metering of consumer installations, theft and pilferage, non-metering of consumer installations and inefficient billing.

At present, KPTCL has entered into a memorandum of understanding for setting up regional business centre in the state. This is being carried out to improve quality and reliability of power supply, maximise the revenues and provide better customer satisfaction.