January 17, 2002
'28'
POWER SECTOR FACING DO OR DIE SITUATION : SURESH PRABHU
TOTAL LOSSES OF SEBs AND UTILITIES AMOUNT TO ABOUT 1.5% OF GDP
The Minister of Power, Shri Suresh Prabhu has stated that the power sector has reached a do or die situation and it needs to be rapidly and systematically restructured to make it commercially viable. The Minister was speaking while addressing the Chairpersons of State Electricity Boards (SEBs) and Chief Executives of Distribution Utilities at the Conference on Distribution Reforms and Modernisation here, yesterday evening. Shri Prabhu candidly stated that the power sector has become a major drag on the economy with total losses of all SEBs/ Utilities put together amounting to nearly 1.5% of the GDP. Against this background, the Minister stressed the need for a paradign shift in the approach of electricity supply in order to bring in accountability right from micro level upwards. Customer satisfaction is the ultimate goal, which the sector should aspire to accomplish. The pre-requisites are supply of quality power, reliability of power and reduction of T&D losses. Given the poor financial health of SEBs, the Government of India is providing financial assistance to SEBs through Accelerated Power Development Programme (APDP). The Minister informed that allocation under APDP is being enhanced to cover more areas. However, Shri Prabhu categorically warned that such assistance will not be made available again and thus this is the last opportunity for the State Electricity Boards to systematically work for T&D loss reduction, strengthening of the sub-transmission & distribution network to improve quality and reliability of power supply and carry out the activities in a business like manner. He emphasized that the precedent conditions drawn up by the Ministry of Power will bring about structural change to enable a distribution circle to be operated as a profit centre with proper accounting mechanism. These precedent conditions need to be signed by SEBs through a Memorandum of Agreement with the Ministry of Power to be able to draw funds under APDP.
The circle level officer, i.e. the Superintending Engineer must be concomitantly delegated with adequate technical, commercial and managerial powers so that he is able to manage the circle as a profit entity, Shri Prabhu emphasized. He explained that the sixty three distribution circles that have been initially selected should be developed as Centres of Excellence for being replicated all over the country in the coming years.
Shri Prabhu expressed the confidence that once a proper system is institutionalized and achievements are reviewed periodically, the ultimate goal of commercial viability of the power sector could be achieved in a short span. The Minister expected significant improvement both in technical and commercial terms in the next six months time in the sixty three distribution circles by all the stakeholders working as partners with synergised efforts.