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AP house adopts electricity reforms bill sans opposition

The Andhra Pradesh assembly today adopted, in the absence of the entire Opposition, the controversial electricity reforms bill which seeks to restructure the state electricity board.

Earlier in the day, members belonging to the entire Opposition were suspended for obstructing the proceedings of the House.

They had charged that the introduction of the bill in the House yesterday by Chief Minister N Chandrababu Naidu was not in accordance with the rules and procedures of the House.

In the absence of the entire Opposition, the passage of the bill was reduced to a mere formality.

The restructuring involved splitting the SEB into three independent corporations dealing with generation, transmission and distribution.

Defending power sector reforms, Naidu, who piloted the bill, said restructuring the SEB was the need of the hour to ensure adequate generation and to enable speedier development of the state.

Naidu said to create an additional capacity of 8,000 MW to meet the demand in the next five years, the SEB would need Rs 590 billion which could not be raised unless the board was restructured.

The reforms would ensure better and quality service to the consumers, he added.

The chief minister said Rs 180.92 billion would be spent on strengthening the existing transmission lines, and Rs 29 billion on upgradation of the distribution system.

Ridiculing the Congress's decision to oppose the bill, he said the party's national leadership had already made its stand known, that private investment in power sector should be encouraged. The Congress manifesto (for the general election) had acclaimed the Orissa model of reforms.

The chief minister also quoted from the statement of Indian Nation Trade Union Congress leader G Sanjiva Reddy, who also heads one of the unions in the board, opposing the strike and supporting the restructuring of the board.

Criticising the Left parties and the Bharatiya Janata Party for opposing the reforms move, Naidu said similar reforms had already been introduced or were being contemplated in the states where these parties were in power, like Haryana, Rajasthan, Uttar Pradesh, Bengal and Kerala.

Naidu assured the House that power distribution would not be privatised immediately.

Reiterating that power tariff would not be hiked for the farm sector, he announced that 50,000 new pumpset connections would be given at Rs 1,000 per HP during the next three months.

Detailing the salient features of the bill, he said it was also proposed to set up an autonomous statutory electricity regulatory commission. The state would be divested of its regulatory functions consequent on its creation, he added.

Naidu, however, said the state government would retain the power to issue policy directions and overall planning and coordination on matters concerning electricity.

The commission would act as a body that issued and enforced licences for transmission and distribution of electricity, besides striving for optimisation of cost and improvement in consumer service by promoting competition. It has been vested with the authority to prevent monopoly abuse and to regulate and adjudicate tariff related issues.

According to the statement of objects and reasons of the bill, it was decided to unbundle the integrated power sector by reorganising generation, transmission and distribution into commercial entities.

Hence, it was proposed to constitute two separate corporations -- one for generation and the other for transmission and distribution -- to be incorporated under the Company Act, 1956.

It was also proposed to constitute subsidiaries or associated transmission and supply companies or corporations which would initially function as wholly-owned subsidiaries of the state government. In due course, it would be open for private sector participation.

Dismissing the Opposition's charge that the bill was being hustled through, Naidu said its outcome was preceded by a series of discussions on the general policy statement issued by the government in 1997, besides meetings with leaders of political parties, legislators, consumers, editors and the constitution of a cabinet sub-committee.

UNI

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