The Hindu : 'Electricity Act will discourage competition'

Online edition of India's National Newspaper
Saturday, Jun 28, 2003

Southern States

Southern States - Karnataka

'Electricity Act will discourage competition'

By Our Special Correspondent

Photo: Bhagya Prakash

Kapil Sibal, MP and member of the Standing Committee on Energy addressing a workshop on ``Implications of the New Electricity Bill-2003'' in Bangalore on Friday.

BANGALORE JUNE 27. The Electricity Act 2003 will help perpetuate private monopoly in the power sector and discourage competition, according to the Rajya Sabha member and a member of the Standing Committee on Energy, Kapil Sibal.

Speaking at a workshop on ``Implications of the New Electricity Act - 2003,'' Mr. Sibal said the Government had enacted the legislation to patronise the leading private power companies. The provision for monopoly in the private sector was unconstitutional, he said and asked the players in the power sector to demand amendments to the Act.

The Act had given powers to the Appropriate Commission, set up by the Government, to grant a licence to two or more persons to distribute electricity through their own distribution system within the same area. But the commission had also been empowered to impose additional conditions, including the capital adequacy, credit-worthiness, or code of conduct to grant licences for new entrants. The additional conditions may discourage the new parties to participate in power distribution.

The Act, she said, had given the Government many powers over the State regulatory commissions. Regulatory commissions constituted by the State Governments were not truly independent. There was a need to amend the Act soon to promote competition and improve transmission and distribution of power.

Harry Bhaul, Director-General, Independent Power Producers Association of India (IPPAI), and Gajendra Haldea, Chief Consultant and Head of the Infrastructure, National Council of Applied Economic Research (NCAER), New Delhi, spoke on the adverse impact of the Act on power generating companies and consumers.

Manju Sawhney Mahindra of the Tower Insurance Company, was present.

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