The Hindu : Power sector reform talks conclude

Online edition of India's National Newspaper
Saturday, Feb 08, 2003

Southern States

Southern States - Kerala

Power sector reform talks conclude

By Our Special Correspondent

THIRUVANANTHAPURAM Feb. 7. The consultants of the Asian Development Bank (ADB) had their final round of discussion with the officials of the State Government and the KSEB to present their views on how to restructure the power sector in the State.

According to sources, today's presentation by the consultants, Crisil and Nexant, was basically an elaboration of the points they had touched upon during their previous meeting with the officials here. Once again they recommended a road map for the reforms process, first to the profit centre set-up and then to the corporatisation phase.

They also disclosed the salient features of the Reforms Bill, which they feel is necessary. The proposed Reforms Bill envisages providing more powers to the State Electricity Regulatory Commission. Besides, it will deal with minute aspects of power tariff rationalisation, cross subsidy, transfer of assets and liabilities (to the corporatised entities), etc.

The consultants also presented their suggestions on how to go about the task of financial restructuring in the KSEB. The State Government, on paper, owes certain sum to the KSEB for subsidies provided to some sections of the consumers on the basis of the Government's policy. Similarly, the KSEB is also a debtor before the Government. The suggestion is whether the figures on either side can be `netted off' so that the reforms initiatives can begin on a clean slate.

How to restructure the KSEB's loans, terminating the high cost ones by availing low interest assistance was another point touched upon. The consultants also identified certain projects for the ADB's financial assistance. These include generations scheme like Pallivasal Extension and Peringalkuthu and transmission schemes like upgradation of the Nallalam-Kaniyampatta line, Malappuram sub-station, Brahmapuram transmission line, Kundara- Kayamkulam line, etc.

The KSEB chairman, T.M. Manoharan, reportedly asked the consultants whether corporatisation was indeed necessary if the efficiency in the power sector could be lifted to the desired levels through the profit centre approach itself. He also expressed doubts whether, in the context of the Energy Bill now before the Parliament, a State legislation to facilitate the reform process was really necessary. He said most of the points proposed to be legislated upon through the suggested Reforms Bill for Kerala would be covered by the proposed Central legislation.

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