COMMENTARY
INTERVIEWS
SPECIALS
CHAT
ARCHIVES

PM pulls up states over delay in power reforms; 'farmers willing to pay for steady supply'

Prime Minister Atal Bihari Vajpayee on Friday asked chief ministers of all states to chalk out a time-bound programme for reforming and restructuring the power sector and devise ways and means to check the pilferage, estimated to be between seven and 25 per cent.

Addressing the conference of chief ministers of all states on power in New Delhi yesterday, Vajpayee expressed his dissatisfaction over the pace of private sector investment in the power sector even though it was opened up almost seven years ago.

He said the financial ill-health of the state electricity boards was mainly due to cross-subsidisation, inefficiency, poor maintenance of network and poor collection of revenue.

Vajpayee said the electricity tariff does not cover the cost of generated power. "How long can this continue?" he asked and raised questions with regard to tariff structure.

''We need a national consensus on the pricing of power to the farm sector. Our farmers are willing to pay a reasonable tariff, provided they get assured and adequate power," Vajpayee said.

Expressing his concern over the high rate of distribution losses, Vajpayee said urgent steps should be taken to rectify the lacunae. This sector is on the verge of severe crisis due to financial non-viability and unable to attract any public or private investment, he added.

Congratulating Orissa and Haryana for bringing in their own reform bills and setting up own state electricity regulatory commissions, Vajpayee said, "Unless we address fundamental problems and bring in structural reforms, our efforts in power sector will not succeed."

Nearly ten states are in the process of setting up their own regulatory commissions, he disclosed and added this is not enough as five months have already elapsed after the enacting the central bill.

"You could easily set up the commissions by issuing notifications," he said and wanted to know the reasons why several states did not respond to the initiatives of the government of India.

Vajpayee said recently the Union Cabinet approved the proposal of the power ministry for setting up large-scale power projects both in public and private sectors.

Vajpayee said a crisis resolution group would be set up to resolve the problems of ten power projects, so that their construction work started before March 31.

This will send a reassuring signal to investors and also to the people at large, he said.

On the issue of large-scale shortfall in the power sector, he said to meet the demand, India needed to generate an additional 40,000 mega-watt of power by 2002, which would require an investment of Rs 2.5 trillion.

UNI

Business news