Financial Daily from THE HINDU group of publications
Monday, Apr 17, 2006
Financial Daily from THE HINDU group of publications Monday, Apr 17, 2006 |
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Industry & Economy - Power Ensure franchisee models work, Centre tells States Anil Sasi
A FILE PICTURE of power transmission lines
New Delhi , April 16 The Government, which is betting heavily on the franchisee model for executing rural electrification projects across the country, has sought prior commitments from States on ensuring commercial viability of the franchisees at the time of determination of their bulk supply tariffs. The Centre has also asked State Governments to provide requisite revenue subsidy to the States utilities under provisions of the Electricity Act 2003 to ensure viability of the franchisees. A capital subsidy proposed by the Centre for the eligible schemes would be given through the State-owned Rural Electrification Corporation, which has already circulated draft guidelines for franchisee development to all States enlisting the various models proposed under the scheme, Government officials said. The system of franchisees is to be implemented across States in a phased manner with the aim of reducing commercial losses, improving revenue collection efficiency and also to provide "doorstep services" to rural consumers, they said.
Five variants
Till now, rural electrification projects have not made much headway, since there have not been too many private players interested in investing in the sector. In the direction of implementing the franchisee scheme, the Centre has already zeroed in on five variants of the franchisee model for executing rural electrification projects and the models are being put to test currently in hamlets in Orissa, Assam, Karnataka, West Bengal and Nagaland. "The model, where local bodies such as co-operatives, individual entrepreneurs and panchayats are involved in the execution or management of rural electrification projects for a fee, has kicked off work on `site-specific' models," a Government official involved in the exercise said.
More Stories on : Rural Development | Power
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