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Home News Power Sector News Bihar - CM nod to power board unbundling/ privatisation

Bihar - CM nod to power board unbundling/ privatisation

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Bihar CMIn a bid to attract private investment in the power sector, Chief Minister Nitish Kumar on 27-07-2011 said the state government will soon go ahead with the unbundling of the Bihar State Electricity Board (BSEB). "The matter is likely to come up before the next cabinet meeting for its approval," a top state official told on Wednesday, soon after chief minister Nitish Kumar wondered at a national meet of experts on "powering Bihar" as to why the proposal to dismantle the BSEB had been hanging fire for the last four years. "Even a government's term expires in five years," he said with a tinge of sarcasm.

‘It is a matter of few days before the much-awaited restructuring of the BSEB takes place,' Nitish Kumar said while addressing a daylong conference on ‘Powering Bihar'.‘Reforms in power sector are necessary to attract private investors,' he said.

He assured hundreds of power board officials that their service condition will not be affected by the restructuring.

He said the Bihar government wants to restructure the state-run BSEB into three independent companies to manage the generation, transmission and distribution of power. Bihar set up an independent State Electricity Regulatory Commission (SERC) a few years ago to initiate power sector reforms. According to energy department sources, the restructuring was to begin in 2001 but got delayed.
The daylong deliberation on "Powering Bihar: Attracting investments for development of the power sector in Bihar" was organized by the Independent Power Producers Association of India (IPPAI) in association with Bihar Electricity Regulatory Commission (BERC).

Inaugurating the meet, CM Kumar said the state government is trying all possible ways to better the situation. He admitted that the state was totally dependent on the Centre for its power needs. "But we are trying to have power plants in the state. The problem is, the Centre is sitting on our demand for coal linkages for private power plants in the state," he said.

State energy minister Bijendra Prasad Yadav said NTPC, the main power provider to the state, does not compensate the state for the transmission losses. "We pay for full supply and get less supply," he rued.
MP and former bureaucrat N K Singh suggested that the National Development Council be petitioned to study equitable distribution of coal among the states for the power sector. "This conference should become an annual event with its focus on states," he said.

BSEB chairman P K Rai made a power-point presentation on the status of power generation in the state. "The Centre should allocate 50% of the power generated at the NTPC's Kahalgaon plant and upcoming Barh plant to Bihar," he said.

IPPAI's DG Harry Dhaul said that private sector must be nurtured by the government. "If we want efficiency and accountability, we should unbundle the sector. Electricity prices have crashed in the past 2-3 years because of the entry of private sector," he said.

BERC chairman U N Panjiar sought to lure private players to Bihar. "The state's generation is negligible and, as such, it offers a great opportunity for investors," he said.

Former Union energy secretary R V Shahi said rural electricity is a challenge. "We must look at franchisee model of distribution. We should have special courts and police stations to control power theft. Renewable energy is a viable solution," he said.

On the occasion, IPPAI made various recommendations to galvanize Bihar into becoming a global destination for power sector investors. They said Bihar has to compete with other states in India as well as other emerging economies of the world to provide attractive returns to investors in its largely underdeveloped but promising infrastructure sector. If it has to emerge as the new Mecca for investors and project developers, Bihar should provide a single window clearance for new projects. For the purpose, the government should set up a committee under the chairmanship of CM.

A broad section of stakeholders from across the spectrum, including consumers, attended the conference.

Officials say once the reforms get under way, private investors would come forward as the state has potential for large-scale investments in the sector. The power situation in Bihar has worsened since Jharkhand was carved out of it in 2000.

Source- Times of India


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