Reforms in Power Distribution a Must – Mos for Power

The Minister of State (IC) for Power, Government of India Sh. Jyotiraditya Madhavrao Scindia has said that a refocus on the investment in power sector is the need of the hour as India™s investment is linked to this sector. While inaugurating a Conference on Restructuring Debts of DISCOMS™ for Sustainable Power Growth here today the minister said that reforms need to be undertaken on war footing by the power distribution companies (Discoms) that provide electricity to our houses and offices. On Debt Restructuring Scheme, the minister said the Union Cabinet has approved the proposal to restructure debt worth Rs 1.9 Lakh Crores of state electricity companies. As part of the scheme for the financial turnaround, the 50 percent of the outstanding short-term liabilities (STLs) of Discoms as on March 31, 2012, will be borne by state governments. This shall be first converted into bonds to be issued by Discoms to participating lenders, backed by a state government guarantee. State governments will take over the liability during the next two to five years by issuing special securities in favour of participating lenders in a phased manner, keeping in view the fiscal space available till the entire loan (50%of STL) is borne by state governments. The balance 50% of STL will be rescheduled by lenders and serviced by Discoms with a principal moratorium of three years.

The Minister informed that the Government, through Ministry of Power, has laid out the following broad strategies to achieve this objective:

¢ Power Generation Strategy: focusing on low cost generation, optimization of capacity utilization, controlling input costs, optimization of fuel mix, technology upgrades and utilization of non-conventional energy resources.

¢ Transmission Strategy: focusing on developing the National Grid, including interstate connections, Technology upgrades and optimization of transmission cost.

¢ Distribution Strategy: achieving distribution reforms by focusing on system upgrades, loss reduction, theft control, consumer service orientation, quality power supply commercialization, decentarlized distributed and supply for rural areas.

¢ Regular Strategy: protecting consumer interests and making the sector commercially viable.

¢ Financing Strategy: to generate resources required for the growth of power sector.

¢ Conservation Strategy: to optimise the utilization of electricity with a focus on demand side management, load management and technology upgrades to provide energy efficient equipment; and Communication Strategy; forming political consensus with the media support to enhance public awareness.

The conference was organized by PHD Chamber of Commerce & Industry in New Delhi today.


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