RESTRUCTURING
The Prime Minister of India, Mr Vajpayee, called for the rationalisation of the power tariff and the restructuring of the State Electricity Boards (SEBs). “Weak SEBs are the biggest problem in India’s power sector,” he claimed.
He said that the SEBs were losing over $15 million every year, and that their financial ill-health was due to “excessive cross-subsidisation, poor economic efficiency, poor maintenance of network, and poor collection of revenue. The SEB’s tariff does not cover the cost of generation, and the industry is over-burdened with tariffs, which is leading to increase in captive generation.
“How long can this continue? Should not the tariff structure be rationalised? Should not State governments ensure that their Electricity Boards improve their performance?”
On power sector reform, the prime minister said that states which had started carrying out reforms were beginning to benefit. Orissa has been able to reduce its transmission and distribution losses by 10 per cent after its SEB was corporatised.