Keep power companies away from politics, says Word Bank
Updated: Feb 25, 2015 04:00:22pm
New Delhi, Feb 25 (KNN) Distribution to the end-consumer continues to be the weakest link in the power sector value chain, according to a World Bank report prepared on the request of the Centre. The study calls for a transition from administratively run to commercially run utilities.
Maharashtra’s experience with private participation in power distribution has been cited as a model for increasing efficiency and improving the quality of service, says the report.
Highlighting the extremely weak financial health of the power utilities, the reports estimates the total accumulated loss at Rs 2.88 lakh crore or three per cent of GDP in 2013. The sector required periodic rescues from the Centre, a bail-out of Rs 35,000 crore in 2001 was followed by a restructuring package of Rs 1.9 lakh crore in 2012.
Among its key recommendations, the report said banks/ lenders should hold utilities accountable for efficient operation and the Centre should pledge against extending further bailouts, give regulators autonomy and adequate resources and hold them accountable for performance.
The report also recommends that state governments also should pay subsidy transparently, fully, and on time. They should insist on evidence that the subsidies were going to intended recipients. (KNN/DB)
Maharashtra’s experience with private participation in power distribution has been cited as a model for increasing efficiency and improving the quality of service, says the report.
Highlighting the extremely weak financial health of the power utilities, the reports estimates the total accumulated loss at Rs 2.88 lakh crore or three per cent of GDP in 2013. The sector required periodic rescues from the Centre, a bail-out of Rs 35,000 crore in 2001 was followed by a restructuring package of Rs 1.9 lakh crore in 2012.
Among its key recommendations, the report said banks/ lenders should hold utilities accountable for efficient operation and the Centre should pledge against extending further bailouts, give regulators autonomy and adequate resources and hold them accountable for performance.
The report also recommends that state governments also should pay subsidy transparently, fully, and on time. They should insist on evidence that the subsidies were going to intended recipients. (KNN/DB)
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