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Power sector reform: Naveen seeks financial assistance to upgrade distribution, trasnmission system
By Our Correspondent
Date : 11-Feb-2012 08:31:57

© Odishatoday.com
Bhubaneswar: Chief Minister Naveen Patnaik on Saturday urged Prime Minister Manmohan Singh to take steps to extend early sanction of financial assistance to the Central Electricity Supply Utility (Cesu) of Odisha under the Restructured Accelerated Power Development and Reform Programme (RAPDRP) during the 11th Plan to enable it to provide quality power and reduce related losses.

Patnaik, in a letter to the PM, "The ministry of power may take necessary steps to sanction financial assistance under R-APDRP scheme to CESU in Odisha without any further delay."

Though the central government introduced the R-APDRP scheme during the 11th plan with the objective of upgrading the sub-transmission and distribution network, including energy accounting in urban areas having a population of over 30,000, the assistance was not available to private utilities, Patnaik said in his letter.

Odisha, encouraged by the new economic policy of 1991, was the first state in the country to privatise the power sector. As part of the reforms, the state government unbundled the Orissa State Electricty Board through separation of generation, transmission and distribution.

Fifty-one per cent of the corporation's share were transferred to four distribution companies -- Central Electricity Supply Corporation, North Electricity Supply Corporation, Western Electicity Supply Corporation and Southco.

Stating that the reforms were carried out with the assumption that the substantial investment in capital works coupled with investment in working capital under the State Regulatory Commission would result in reduction of AT&C losses and the Discoms would be self-reliant, the Chief Minister regretted that the ground reality was that the World Bank stopped financing the capital project midway.

He said due to lack of finances, the Discoms could not mobilise investment and the objective of bringing substantial reduction of the AT&C losses could not be achieved.

Patnaik has urged the Ministry of Power to take necessary steps to sanction financial assistance under the RAPDRP to the Cesu without any further delay. Besides, the scheme may be suitably revised to cover private utilities too, he argued.