Nod For Power Reforms In Haryana, Rajasthan

The Union power ministry has given its approval to the bills to reform and restructure the power sectors in Haryana and Rajasthan. The Orissa model is being adopted for the reforms. The bills are being sent to the home and law ministries for approval since electricity is a concurrent subject. Once the President gives his assent to the bills, these will be introduced in the two state legislatures for the reforms to be undertaken in three stages.

According to power ministry officials, the reforms will be undertaken over a period of six years in the areas of generation, transmission and distribution.

 

Independent regulatory commissions will be set up in the two states to revise and rationalise the tariff structure for all categories of consumers, including agriculture, to ensure that the state electricity boards become viable, and also do licensing for distribution.

Haryana is already ahead on the reform path. The state government had recently announced its decision to embark on a World Bank-aided Rs 5,000 crore reform and restructuring programme.

One of the major components of this programme is to privatise the distribution system in phases. According to the government, the transmission and distribution systems will be greatly strengthened with the assistance of the World Bank.

Haryanas current proposal is to privatise the distribution system in one zone consisting of the Karnal, Panipat, Sonipat and Rohtak districts.

The Rajasthan government plans to corporatise the Rajasthan State Electricity Board (RSEB) and has named Rajasthan State Electricity Corporation Ltd (RSEC) as the corporate successor to RSEB.

The state government expects this corporation and the regulatory commission to be in place by June 1997 after the state assembly passes the bill.

The government has already undertaken tariff rationalisation and plans to privatise distribution in four service areas which represent 24 per cent of the total distribution area.

Rajasthan is seeking assistance from the World Bank as well KfW for its reforms.