Delivering a talk at Institute of Engineers on Monday, Deo said that in 2002 most state power utilities did not have money to pay NTPC and Powergrid. "A mechanism was devised whereby unpaid dues of the utilities were converted into bonds of concerned state governments. This amount was deducted from the state's plan allocation. This kind of payment mode won't be acceptable to private players, who want instant payment. Anyway, this mechanism will end in 2014," he said.
Deo pointed out that by 2017, at least 50% of power generation will be in private hands. "The power companies will not be able to buy requisite quantum of power even though it will be partly available. The rates of power in the exchanges have already reduced as power utilities are not buying," he said.
Turning to Maharashtra, he said that the government set up MERC only high court asked it to do so. "The government did not give full independence to MERC to determine tariff. Using these powers, it stayed the tariff hike before 2009 elections for some months. MSEDCL had bear to Rs 2,000 crore loss, which was recovered from consumers later."
On franchisee model, he said that the agreement should be vetted by SERCs. He pointed out that most franchisees other than Torrent did not have experience. "Privatisation of power sector is not going to happen in near future," he said. M D Date, Prakash Kulkarni, S F Lanjewar and Wilson Varghese also expressed their views on the problem.
Source- Times of India