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PM INAUGURATES THE STATE POWER MINISTERS' CONFERENCE
The following is the text of the speech of the Prime Minister, Shri Atal Bihari Vajpayee at the inauguration of State Power Ministers' Conference here today:
"I am happy to be here today to inaugurate the Conference of Power Ministers of the States. This conference assumes importance in view of the fact that power shall play a defining role in India’s socio-economic development in the Twenty-first century.
Our expanding industrial base, increasing agricultural demand and galloping domestic requirement necessitate rapid enhancement of India’s total power generation capacity.
More importantly, we should bear in mind that power and energy production as well as management is crucial to our national security concerns. A country that is self-sufficient in power and is not burdened by energy shortages, is a secure country.
If we look back at the performance of the power sector in the past fifty years, we will find that the growth of this sector has been impressive. From a little over thousand Mega Watts, our total production today has gone up to around hundred thousand Mega Watts. This is no small achievement.
However, despite this impressive growth, we continue to face power shortages. In the Eighth Plan period, we could achieve only a little above half the target we had set ourselves. In the Ninth Plan period, we are likely to add roughly two-thirds of the additional capacity we have targetted.
The poor financial health of our State Electricity Boards and as yet inadequate private sector investment in the power sector are largely responsible for this inability to meet targets.
In order to meet the requirements of the opening decades of the new century, we have to add more than a lakh Mega Watts during the Tenth and Eleventh Plans. To achieve this target, we would need around Rupees Eleven lakh crores, but the resources that are likely to be available would be about only a third of that amount.
The Union Government and the State Governments, therefore, have to jointly consider various options to mobilse resources to meet the gap.
The issue of resource mobilisation apart, the Centre and the States also need to jointly tackle some other problems that have been plaguing the power sector and holding back rapid capacity addition. If I were to broadly list them, they would be:
I would also urge you to deliberate on inter-regional transfer of power so that power deficit regions can benefit from the power surplus regions. This, in fact, calls for urgent attention as we are yet to ensure uniform distribution of power resources.
Our Government has listed the restructuring and reforming of the power sector as a priority initiative. We have already taken several measures in this regard.
We have been emphasising on the development of hydel power, especially by developing projects in the North-East that have immense potential. We are also committed to strengthening the National Power Grid and delinking transmission and distribution from generation so that we can ensure both reliability and quality of power to consumers.
We need to take a hard look at the financial health of our State Electricity Boards. Of the twenty State Electricity Boards, eighteen have a negative rate of return. This continues to be a major concern for both the Union Government as well as the State Governments.
The financial health of the State Electricity Boards can be gauged from the fact that their commercial losses have mounted four times in the last ten years. However, I am happy to note that the State Electricity Boards of Karnataka and Maharashtra are in better health.
It is often suggested that subsidies are a solution to our problems. But experience has shown that subsidies do not work beyond a point. On the contrary, they have not only affected the performance of the power sector but also resulted in unreliable and poor quality of electricity. I have no doubt that consumers today would much rather pay for reliable and quality power.
As part of the reform and restructuring process, we have to break with the mindset of the past and give up the idea of monolithic State Electricity Boards. We have to also pursue active private sector participation in power generation, transmission and distribution. I am happy to note that the State Electricity Boards have been restructured in Orissa, Haryana, Andhra Pradesh, Karnataka and Uttar Pradesh. A number of other States are also engaged in the restructuring process.
I understand that a draft Bill for reforming the power sector has been circulated among you. Your views on the draft Bill will be a critical input for decision-making in this regard.
I look forward to the conference resulting in an agreed upon blueprint for accelerated development of the power sector.
I thank you for this opportunity to share some of my thoughts with you.
Jai Hind!"
KASHIRAM RANA CALLS FOR POSITIVE ATTITUDE TOWARDS THE BENEFICIARIES OF TUFS
INTERACTIVE SEMINAR ON TECHNOLOGY UPGRADATION FUND SCHEME (TUFS)
Shri Kashiram Rana, the Minister of Textiles has assured the beneficiaries and potential users of the Technology Upgradation Fund Scheme (TUFS) to come out with suggestions, ideas and pragmatic implementation solutions to make the scheme effective. He was speaking at an interactive seminar on Technology Upgradation Fund Scheme organised here today. The seminar was organised to discuss problems relating to the unsatisfactory implementation of the TUFS with the representatives of the state governments, banking sector and financial institutions. Shri Anil Kumar, Secretary (Textiles), Shri Ramakrishnan, Joint Secretary in the Ministry, Shri Khatua, Textile Commissioner and Shri G.P. Gupta from IDBI were also present on the occasion.
Welcoming the participants, Shri Kashiram Rana stated that while the response to TUFS in the initial years was good, the tempo slowed later. He invited the beneficiaries to tender advice to the Ministry and the nodal agencies on practical solutions to make the scheme more attractive. The Government is constantly monitoring the progress of the scheme, he added. The Minister of Textiles further stated that the Government has not fixed any targets, as the focus is to popularise the scheme to the maximum possible extent. If the scheme requires , steps would be taken to provide more funds, he further said. Shri Rana urged the nodal agencies to take positive steps to implement the scheme as per the best interests of the borrowers. The scheme would also percolate down to the beneficiaries at the lower end, Shri Rana added.
Citing examples of the actual complaints received by his office as to the harassment faced by the beneficiaries faced by the beneficiaries, the Minister of Textiles stated that banks ought to have a positive attitude towards the borrowers and help mitigate the sufferings. Shri Rana stated that the Ministry would make appropriate changes to make the package attractive. This interactive session has been specially organised to formulate appropriate responses he said.
Earlier, delivering the keynote address Shri Anil Kumar, Secretary (Textiles) stated that the seminar is an honest attempt to solve the problems facing TUFS. The scheme launched in April 1999 is conceptually sound and the issue is now only of implementation, he said. For successful implementation of the scheme, all the agencies have to better co-ordinate so that right and appropriate modes are accepted and scheme made successful. He hoped that the periodic interaction would make the scheme a success.
RAIL BUDGET IS NEITHER POPULIST NOR ANTI-REFORMS: MAMATA BANERJEE
The Railway Minister Ms. Mamata Banerjee has said that the Railway Budget for 2000-2001 is not an anti-reforms or a populist budget. Rather it enshrines the real spirit of the reform process and shows a commitment on the part of the railways for generating additional resources through various innovative schemes to fund the Railways’ developmental progrmmes. She was inaugurating the Conference of the General Managers/ OSDs of the Zonal Railways and the newly created zones of the Railways here at New Delhi today.
Ms. Banerjee said that the Budget is pro-reforms as it seeks to have greater cooperation of private sector and public sector to achieve the goal of providing to the people the best possible transport system at the least cost. She underlined that the Budget has taken an overall view of the railway requirements of the people of almost all the parts of the country without any bias or prejudice towards any particular state or region.
She urged the railway employees at all levels to rise to the occasion and work dedicatedly to provide the best possible services to the rail users. Time-bound completion of projects and maintaining punctuality need to be ensured, she emphasised.
Earlier, the Chairman of the Railway Board, Shri V.K. Aggarwal said that railway workers have to strive hard and work in a team spirit to achieve the goals that have been assigned by the Minister in the Railway Budget. He said that maintenance of assets in terms of ensuring greater productivity should be the top priority. At the same time generation of additional resources and greater security and safety of the passengers will be the major watchword for the railway managers and employees. He underlined that the Indian Railways are committed to provide better maintenance and punctuality of trains.
The Conference was also addressed by the Ministers of State for Railways Shri Bangaru Laxman and Shri Digvijay Singh.
The two-day Conference has been called to discuss the various plans and programmes in terms of the Railway Budget. It focuses on issues pertaining to maintenance of railway infrastructure, rolling stock and ensuring better and efficient functioning of the railway network.
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POWER MINISTERS AGREE TO PERSUE REFORMS PROCESS
RESOLUTIONS AT POWER MINISTERS’ CONFERENCE
The Power Ministers of various states and Union Territories met here to day. The Prime Minister Shri. Atal Bihari Vajpayee inaugurted the one day conference. Shri. P.R. Kumarmangalam, Power Minister, and Smt. Jayawanti Mehta Minister for State for Power also addressed the conference.
The Conference took note of the impending difficult situation facing the power supply industry in the country due to continuing decline in commercial viability of the sector as a whole. It noted the fact that:-
1. Outstanding dues of CPSUs have been increasing and have now reached Rs. 23,000 crores. This trend if maintained would adversely affect their current operations apart from inhibiting their future expansion plans.
2. Financial closure for private power projects is becoming increasingly difficult.
3 The states are unable to finance new projects on their own.
4. Increases in budgetary support from state governments as well as central government for this sector is not feasible due to fiscal deficits.
II. The primary factors responsible for this unsustainable financial situation are:-
i) Theft and pilferage which at the macro level are estimated to be over Rs. 20,000 crores per annum.
ii) Technical losses in transmission & distribution for the country are also too high.
iii) More than 50% of the thermal stations in the state sector run at an operational efficiency of less than 40%.
iv) The average annual operational losses of the State Power Sector for the country is over Rs.12,000 crores.
III) It was also recognised that the cross subsidies cannot be sustained if industrial tariffs make Industry non-competitive in the new environment of increasing globalisation with elimination of quantitative and other restrictions. It becomes necessary to ensure that Indian Industry is not handicapped by unsatisfactory power supply or by tariff which makes it non-competitive.Further, the consumer, including the farmer has a legitimate claim for uninterrupted good quality power supply. His willingness to pay reasonable costs is underestimated.
RESOLUTIONS
1. The Power Ministers resolved that after taking into account all the problems facing the power sector , with the intention of achieving commercial viability and providing power at reasonable rate to all, reform must be undertaken with determination, vigor and a sense of urgency. Delay in reform only increases the financial cost of reforms, and the burden of liabilities only increases. Reforms must begin to show results within the next 2-3 years. The key elements of the reform strategy are:
a) Energy Audit at all levels.
b) Time-bound programme of 100% metering of all consumers by December, 2001.
c) Reduction and finally, elimination of power theft within a specified time frame.
d) Strengthening/upgradation of sub-transmission and distribution system by taking sub-station as an unit on a priority basis.
2. If the above appears unattainable in the existing set up corporatization/cooperatization/privatization of distribution would have to be undertaken.
3. Since more than 50% of thermal stations within the State sector are running at a PLF below 40%, immediate Renovation & Modernisation including Life Extension would need to be undertaken on an urgent basis.
4. Effective functioning of State Electricity Regulatory Commissions is essential for rationalization of tariff, and balancing the interests of the consumer and the need for commercial viability of the utilities in the environment where private sector participation in the industry is expected to gradually increase.
5. Unbundling and corporatization of State Electricity Boards, and bench-marking through separate distribution profit centres/corporations/companies would facilitate the Regulatory Commissions in promoting competition within the power supply industry - competition being the key to lower prices.
6. It was noted that the power system network in country has an unmatched reach to consumers and with the installation of optic fibre cables along the existing power lines using its right of way, it has the potential of generating very large resources in the coming years by providing facilities for multipurpose communication including cable TV, IT services, Telecom services, etc. Hence efforts need to be made to creatively tap this potential source of large revenue from convergence.
7. To promote reforms, a central legislation which obviates the need for separate enactments for the States would be welcome. The draft Bill submitted by the NCAER would form the basis for a national debate and a consensus on the contents of the new Bill. The States would be sending their detailed comments on this draft Bill, to the Ministry of Power at the earliest.