The Hindu : Tamil Nadu / Chennai News : Deadline for TNEB restructuring extended

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Monday, Sep 29, 2008
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Tamil Nadu

Tamil Nadu - Chennai

Deadline for TNEB restructuring extended

T. Ramakrishnan

CHENNAI: While agreeing to extend the deadline for restructuring the Tamil Nadu Electricity Board by 15 days, the Union government has advised the State to establish a transmission utility immediately and prepare a “road map” for further re-organisation of the Board.

On Friday, Union Power Secretary Anil Razdan and Chief Secretary K.S. Sripathi had a telephonic discussion. It was learnt that Mr. Razdan requested that steps be taken expeditiously.

The Centre’s decision was a sequel to the plea made by the State for extension of six months for keeping the TNEB in its present shape. The deadline given by the Centre in July expired on Wednesday (September 24). According to the 2003 Electricity Act, State Electricity Boards could no longer remain vertically integrated, performing the functions of generation, transmission and distribution. The law also prohibits utilities engaged in transmission from trading in electricity. However, under a clause of the Act, the Centre grants extension of deadline, if sought by States.

Recalling the discussions held in the early August, the Union Power Ministry, in its communication sent to the State on Friday, said the State had agreed to separate the transmission activity soon and plan for separation of other functions at the earliest. A road map was to be formulated by September. However, the State had not yet sent any road map.

The communication said the splitting of generation, transmission and distribution into separate entities would provide the new organisations with functional autonomy, and eventually result in improved functioning, especially in distribution. It also pointed out that some other States had made progress, splitting the three functions into separate entities.

An official source said that as per the Electricity Act, States had to notify a scheme, stipulating that the property, rights and liabilities of the Boards be vested in the State governments on such terms as may be agreed between the governments and the Boards. Subsequently, the governments would re-vest in a government company.

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