ACCELERATED POWER DEVELOPMENT AND REFORMS PROGRAMME MONITORING
COMMITTEE APPROVES SUB-TRANSMISSION AND DISTRIBUTION PROJECT PROPOSALS
WORTH RS. 1,196 CRORE COVERING 105 TOWNS
The Minister of Power, Shri Suresh Prabhu chaired
the 5th Meeting of the Monitoring Committee of the
Accelerated Power Development and Reforms Programme (APDRP) here
on July 16th.
The APDRP Monitoring Committee approved sub-transmission
and distribution project proposals worth Rs.1196 crore covering
105 towns all over the country. The APDRP fund component in this
would be Rs.654 crore approximately. The Power Finance Corporation
(PFC) and the Rural Electrification Corporation (REC) would provide
matching funds as loans in case the State Government or the utilities
are unable to raise funds on their own or through their internal
resources. The Committee also approved taking up 167 towns in
the next phase.
It was also decided to establish a Reliability
Index for all towns. To start with State capitals and towns and
APDRP will be covered. Later on this would be expected to cover
all towns having population above one lakh.
The Committee also decided that PFC and REC
will release funds in advance to the utilities and the State Governments
for execution of its projects to expedite implementation.
It was also decided that PFC and REC will
provide finance to utilities without insisting for government
guarantees, provided the State governments or the utilities are
willing to escrow their revenues from the specific town or circle
in which the project is implemented. This would benefit the State
governments and utilities in reducing the overall cost of implementation.
The Monitoring Committee also approved projects
for all 63 Distribution Circles amounting to Rs.4241.20 crore.
Implementation of the programme in these circles will be in a
phased manner. In the first phase, it will concentrate on towns
in order to ensure quick results and generation of immediate returns,
which would help to reduce the aggregate technical and commercial
losses. This should also enable the SEB to generate surplus which
could be utilized for improving the distribution network of the
specific distribution circle in the second phase.
An Incentive Scheme was also approved for
SEBs to reduce cash losses. The financial year 2000-01 has been
identified as the base year for reviewing performance of SEBs
and improvements thereon will be incentivised. The reduction in
cash losses will be determined net of tariff increases, additional
generation/import of power and additional cost of inputs. This
scheme is expected to motivate not only utilities but also state
governments to sustain and accelerate the reform process and turn
around the SEBs in the next 3-5 years. The incentive would be
on a one-to-one matching basis. The SEBs could utilize this incentive
to meet their liabilities, establish pension funds, VRS, interest
liability and supplement internal resources for undertaking capital
expenditure in strengthening of sub-transmission and distribution
networks.
APDRP Monitoring Committee also decided to
institute an Award Scheme for "Best Performance on Distribution
Network". Rs.5 crore has been provided for this and the performance
of utilities for the year 2001-02 will be taken into account.
The Central Electricity Authority (CEA) would administer the award
scheme.
The Committee appreciated the preparation
of Detailed Project Reports (DPRs) by NTPC and Power Grid and
their Advisor-cum-Consultants. It also decided that feasibility
reports should be prepared for the remaining circles by the end
of December 2002, in order to identify the actual investment required
in the distribution sector. These reports are expected to establish
bench marks to attract investments in the power sector. This work
will be done by CEA in coordination with NTPC and Power Grid.
It was also decided that a mandatory post-project
audit would be carried out by CEA. The audit will audit the benefits
stated in DPRs with actual benefits accrued.
A Steering Committee under the chairmanship
of Secretary(Power) has also been constituted for expeditious
approval of project schemes/DPRs.
The Committee noted that the states of Karnataka,
Andhra Pradesh, Maharashtra, Gujarat, Rajasthan, Mizoram and Tamil
Nadu have signed Memorandum of Agreements agreeing to be reviewed
against pre-determined milestones and benchmark parameters to
improve the financial health of utilities and provide quality
supply of power.
The Committee appreciated the decision taken
to get the utilities rated by independent rating agencies like
CRISIL and ICRA for independent evaluation of reform process in
the power sector and financial viability of utilities.
