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Thursday, Jun 13, 2002

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White paper may set off MSEB unbundling

Archana Chaudhary

MUMBAI, June 12

A WHITE paper on power sector reforms, to be presented in the State Assembly by June-end, could be the beginning of unbundling and eventual privatisation of the Maharashtra State Electricity Board, State Government officials said.

A general consensus emerging in the power industry is for dividing MSEB into three companies, one each for generation, transmission and distribution. The distribution arm may be sold off to a private sector company.

The biggest likely beneficiaries of such a move by the State will be Tata Power and BSES. Both companies' stocks were heavily traded on the two major exchanges today. Tata Power saw hectic activity with 8.44 lakh shares being traded on the BSE and 11.96 lakh shares on the NSE, closing at Rs 134.40 per share (Rs 132.60) and Rs 133.90 per share (Rs 133.70) respectively. BSES Ltd closed at Rs 230.60 per share (Rs 225.25) on BSE and Rs 231 per share (Rs 225.10) on the NSE today.

Analysts said the stocks were up on expectation that power reforms would finally be back on track and the State Governments were earnest about it.

"The white paper is expected to study power reform models adopted elsewhere in the country -- Delhi Vidyut Board, Orissa and Haryana,'' said a senior State Government official. According to State Government officials, MSEB's move towards unbundling and privatisation could, however, meet with stiff opposition from employees.

About 1.5 lakh MSEB employees had struck work in September 2000 when the Government proposed trifurcation of the SEB in the Maharashtra State Electricity Regulatory Bill, 2000. The Bill was eventually withdrawn.

This time the Government appears to be determined to reform the power sector with the issue being debated threadbare at four internal seminars. It has also sought suggestions on the proposed reforms before the end of June.

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