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Bengal to sign MoU with Centre on power reforms

Our Bureau

KOLKATA, May 6

AFTER much dithering, just before the Assembly elections on May 10, the West Bengal Government has finally agreed to sign a MoU with the Centre on State power sector reforms.

Confirming this development, officials told Business Line that the State Government would now have to finalise its `road map' for power sector reforms.

With the West Bengal government's initial resistance being overcome in this respect, the draft MoU has already been sent to the Centre and the final agreement is expected to be signed at the level of secretaries shortly.

It may be mentioned that in February this year when the issue of signing such MoUs as a prerequisite for getting concessional finance from the Centre was first mooted, the West Bengal government had ruled it out, contending that it was not proper for Sta tes to enter into MoU with the Centre.

In the process it lost out on a chance to get a slice of the Rs 1,000 crores fund which had been earmarked for allotment to States signing MoUs under the Accelerated Power Development Programme (APDP) of the Union Power Ministry. The Centre had asked St ates to list their specific needs while giving their blueprint for power reforms

Even as 16 States signed such MoUs, the Centre doubled the APDP kitty. The issue figured once again at the Chief Ministers' and Power Ministers' meeting addressed by the Prime Minister in March 2001.

WBSEB, which is expected to be one of the main beneficiaries under this programme, is ready with a shelf of projects which it hopes to implement with the funds that is now expected to flow to the State with the formalisation of the MoUs.

Assistance under APDP would be available for specific schemes for renovation and modernisation, transmission and distribution, system improvement and metering schemes. It is felt that these would have a direct bearing on improving the physical and financ ial health of state electricity boards, which are at the centre of power sector reforms.

The draft sent by the West Bengal Government has pointed out that the State is not in favour of unbundling WBSEB per se. The document notes that the process of setting up separate companies for generation began way back in 1985 in West Bengal, when the W est Bengal Power Development Corporation was set up. Gradually the generation outfits were proposed to be transferred to this company.

A separate outfit has also been set up for rural energy and the independent electricity regulatory commission has already begun holding hearings on tariff revision proposals.

The document also points out that the State Government has already initiated steps to decentralise the operations of WBSEB on the basis of cost and profit centres to improve its viability. Steps taken to introduce 100 per cent metering by December 2001 a nd reduce T & D loss have also been mentioned in the draft MoU.

On the issue of support from the Centre, the blueprint States that financial assistance is needed for the metering programme and rural electrification schemes.