Financial Daily from THE HINDU group of publications
Thursday, Feb 21, 2002
Assam power regulator yet to start functioning
GUWAHATI, Feb. 20
THE one-man Assam Electricity Regulatory Commission (AERC), set up in August 2001 under the chairmanship of Mr N. Barua, former Chief Engineer, NEEPCO, is yet to start functioning.
This is despite the dismal power scenario in Assam and the poor performance of the Assam State Electricity Board (ASEB). The SEB has achieved a power load factor (PLF) of less than 25 per cent, while transmission and distribution (T&D) losses are at 40-45 per cent.
All this had necessitated the setting up of the AERC and the immediate implementation of the reform measures suggested by the Committee on Fiscal Reforms (COFR).
ASEB is the only electricity board in the country with the highest-ever production cost of Rs 7 per unit, followed by Bihar with Rs 4.50, against the national average of Rs 3.50.
The COFR, headed by the former chief secretary, Mr H.N. Das, has recommended that ASEB, being the largest of the 49 State PSUs with an accumulated loss of Rs 3,124 crore, needed an efficient management superstructure with good financial control and a healthier work culture.
It found that ASEB's loan liabilities to financial institutions were around Rs 1,019 crore. While its monthly expenses are around Rs 82 crore, it collects only about Rs 40 crore. Against an installed capacity of 590 MW, actual generation is between 120 and 150 MW.
The reforms committee was not for dividing ASEB into two or three inter-dependent organisations like in other States. Such division would only add to overheads, it said. Instead, it recommended that ASEB should set up three functional strategic business units: Generation, transmission and distribution, each of which should aim at self-sufficiency over a period of time. The panel also recommended that the Government and ASEB should settle the outstanding dues on account of rural electrification, dues of the Government and local bodies and other dues. The Government to an extent could convert some of the outstanding dues into equity.
It suggested that ongoing projects such as the Karbi Langpi Hydro Electric plant and gas supply to Lakwa thermal plant should get top priority. To reduce establishment costs, ASEB's workforce of over 19,000 must be reduced.
Demanding measures to improve the power situation, the Joint Action Committee of ASEB employees launched a 72-hour strike on February 16 and the State Government had to invoke the Essential Services Maintenance (Assam) Act, 1980 for a period of six months.
However, such measures would not serve the purpose of improving the power situation, sources said, stressing that the steps suggested by the COFR must be taken up immediately and moves initiated so that the AERC can start functioning right away.
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