Voice of Electricity Workers April-June 2002 Index
THE CONDITIONALTIES PRESCRIBED FOR FUND DISBURSEMENT OF APDRP
The power ministry has put in place a set of milestones conditional to which
disbursement of funds under the Accelerated Power Development and Reform
Programme (APDRP) would be done for transitional financing of reform steps under
undertaken by state governments.
The board parameters prescribed by the
ministry include putting in place a regulatory framework, taking steps towards
restructuring of SEBs (including unbundling and privatisation) and reduction of
transmission and distribution (T&D) losses by atleast 4 per cent per annum so
that the total losses are not more than 18 per cent by 2006-07
Other targets
include achievement of plant availability and plant load factor targets and
reduction of cash losses..
The Centre has allocated Rs. 3500 crore under the
revamped APDRP for the current fiscal. Access to state-specific allocation would
not be automatic and would be linked to concrete and measurable steps in the
direction of power reforms.
As there could be a time gap in achievement of
the performance milestones by the SEBs, about 25 per cent of the allocation
under APDRP would be released to states at the beginning of the year on promise
by them regarding achievement of the milestones.
The release from APDRP
would be made twice a year, the second tranche being released in the middle of
the year after a review of the year after a review of the performance by the
states.
In order to incentivise performance, the Centre plans to disburse
the unallocated protion of the share of non-performing or poorely performing
states in a particular financial year could be allocated in favour of the
performing states.
Releases under the programme would be linked to
time-bound Power Sector Reforms in the states and achievement of definite
performance milestones towards restoration of financial viability of the SEBs.
The revamping of the earlier Accelerated Power Development Programme (APDP),
which was more of an investment programme, to a financing mechanism such as
APDRP was prompted with the view to accelerate reforms.
While firming up the
revamped APDRP, the approaches considered included linking draw down of funds to
the bottomlines of SEBs as measured by reduction in cash losses.
The other
approaches considered are allocating funds proportional to progress along the
reform path without any weightagefor each step and also draw down based on
performance criteria with specific weightage attached to each step.
THE
CONDITIONS IN SHORT ARE :
1. 1. Constitution of State Electricity Regulatory
Commissions
2. Submission of Application to SERC for multi-year tariff
notification
3. Timely payment of subsidy by state governments to SEBs
Restructuring of SEBs
1. Unbundling of SEBs
2. Privatisation of
distribution systems
Reduction of T&D losses by at least 4 percent per annum
- T&D losses should not be over 18 percent by 2006-07.
1. Energy Audit at
11KV feeders
2. Installation of consumer meters by April 2003
Revenue
arrears should not exceed more than 12 percent (45 days billing) of total
revenue in an year.
Plant availability and plant load factor for utilities
above a prescribed limit
Reduction of cash losses
States irked over fund
disbursal for power reforms
State Governments raised objections to the
mechanism of fund disbursement under the reform linked incentive schemes of the
power ministry and were also unhappy not only because the quantum of funds was
slashed under the scheme during the last fiscal, but because disbursements were
also delayed. The disbursement took place only on April 4.
The accelerated
Power Development Project (APDP) has been touted as a major reform initiative by
the ministry. But in the last fiscal, a disbursement of only Rs.425 crore was
made by the finance ministry for the project, against the budgeted Rs.1500.
The main problem is the requirement of numerous micro details conditional to
which funds are disbursed to state states under the programme. Consequently
tracking progress on all fronts had become difficult and release of funds even
more cumbersome.
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