BSES THREATENS TO PULL OUT OF POWER DISTRIBUTION IN ORISSA
The Bombay sub-urban Electricity Supply Corporation (BSES) has threatened to
pull out of the three power distribution companies it manages in Orissa,
expressing dissatisfaction over functioning of the sector in the state.
In a letter to Orissa Chief Secretary DP Bagchi, BSES chairman and managing
director RV Shahi said the BSES board felt that the state government and the
Orissa Electricity Regulatory Commission (OERC) must take urgent remedial steps,
or the corporation would have to review its continuance in the state.
Referring to to the Sovan Kanungo panel report, Shai said : "If the state
government did not respond to the short -comings and gaps identified by the
committee, it will be impossible for BSES to continue to work in Orissa".
The panel, headed by retired bureacrat Sovan Kanungo, has been set up to study
the power sector reforms in the state.
The BSES threat, coming on the heels
of US utility major AES Transpower abandoning the management of another
distribution firm, Central Electricity Supply Company (Cesco), last year, has
given a jolt to the fledging power sector reforms in the state.
Due to overvaluation of assets at the time of transfer of distribution companies
from Grid Corporation (GRIDCO) to private ownership, the letter says, the input
cost of power has gone up substantially and the three BSES managed distribution
companies are paying Rs.325 crore more to gridco per annum towards purchase of
power.
The BSES has demanded a realistic revaluation of assets in line with the Kanungo
committee recommendation.
BSES took the controlling stake of 51 per cent in
three distribution companies - Norther Electricity Supply Corporaation, Western
electricity Supply Corporation and Southern Electricity Corporation (South) - on
April 1, 1999 with Gridco and employees holding rest 49%.
The letter also points out that the distribution companies are being
unnecessarily blamed for slow progress in rural electrification. It has also
criticized the state government for the delay in release of the subsidy money
despite letters from the regulatory commission.
Shahi has also expressed unhappiness over non-release of the World Bank fund to
the distribution companies in time.
The escrow arrangement with Gridco for payment of bulk power purchase bills is
causing serious limitation in smooth functioning of the companies.
" Though the arrangement was that the distribution companies can keep 25 per
cent of the revenue with them to meet statutory obligations and other essential
needs, this is not being done, the BSES chairman said.
(Courtesy Business Standard February18, 2002)
