(a) : whether attention of the Government has been drawn to the news-item captioned `Wary FIs turn heat on SEBs, revise escrow projections` appearing in the Economic Times dated January 10, 2000;
(b) : if so, the facts of the matter reported therein; and
(c) : the reaction of the Government thereto?
THE MINISTER OF STATE IN THE MINISTRY OF POWER
( SHRIMATI JAYAWANTI MEHTA )
(a) : Yes, Sir.
(b) & (c) : In several States the total number of projects
planned in the private sector, taken together with the projects
being taken up by the State Electricity Boards (SEBs) themselves
or by the Central Power Generating Companies, have a combined
capacity in excess of the capacity of the States to give escrow
cover to these projects. Because of the financial weakness of
the SEBs, absence of any competition and inability to rationalise
tariffs, the Private Power Producers are experiencing
difficulties in infusing capital into the power sector.
Financial health of State Electricity Boards has been on the
decline reducing their escrowable capacity. These issues were
discussed in the Power Ministers Conference held on 26.2.2000 and
the commitment to supply quality power on demand at reasonable
rates to all consumers was re-emphasised. To achieve this, it
was resolved that the reforms must be undertaken with
determination, vigor and a sense of urgency. The key elements of
Reform Strategy will be reduction/elimination of power theft,
energy audit and strengthening of sub-transmission and
distribution system, unbundling of State Electricity Boards etc.
These measures which have been deliberated upon in the
Conference of Power Ministers` and measures like corporatisation/
cooperatisation/privatisation in the field of distribution of
electricity, 100% metering of all consumers etc., are expected to
rationalise tariffs in the States thereby progressively enabling
them to recover their cost and generate greater resources to
support capacity addition and improving the reliability and
adequacy of power delivered to the consumers. The matter was
also discussed in the meeting of Crisis Resolution Group (CRG)
and a plea has been made to IFIs to assess the strength of State
Electricity Boards on the basis of reform measures undertaken by
them rather than on the Escrow Cover.