Excerpts from address of Union Minister of Power Shri Suresh Prabhu

Voice of Electricity Workers

April- June 2001

Excerpts from address of Union Minister of Power Shri Suresh Prabhu in the Hon”ble Prime Ministers Conference of Chief Ministers on Power at New Delhi 3^rd March, 2001

It is for the State Governments to take a view on how to effect reforms in distribution. The options available range from privatisation, to a system of local franchisees/Users Associations to the devolution of the responsibility of distribution to Panchayats and local bodies as envisaged in the 73^rd & 74^th Constitutional Amendments to enforcement of accountability through local profit centers in the existing set up. I have constituted a policy committee under Secretary Power on Distribution Reforms. It is for you to decide what is the best course of action suited for your State. However, we must accept that the situation cannot be allowed to drift.

We are negotiating State specific MOUs on reforms with the states. These are customized and we are not insisting on any uniform blueprint. We all share the objective of providing electricity at affordable rates to all. We have decided that central assistance through the Accelerated Power Development Programme which has been introduced this year to finance modernization of distribution in identified distribution circles as well as for renovation and modernization of older plants would be linked to implementation of the milestones of the reform programme agreed to in the MOUs. If on current operations some states are able to break even in two years and are moving towards positive returns. We would try and work out a special package for taking care of their past liabilities with the help of the Finance Ministry. Financial institutions and Multilateral Donor Agencies.

It would be recalled that, at the last conference of Power Ministers held in February, 2000, we had noted the need for a new Central legislation to promote reforms and obviate the necessity of separate enactments by the states. We have had detailed discussions on the proposed new Electricity Bill. There have been substantive inputs from the States and stakeholders. We are in the process of finalizing the Bill on the basis of these inputs and suggestions. If you have any further comments or advice please send it to us at the earliest.


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