K’taka to open up power sector

"With this, both generation and distribution will be privatised soon," he added. He did not give details of the privatisation process. Krishna said starting November 1999, Karnataka had decided to spend about Rs 1,500 crore ($344 million) annually to upgrade its power transmission system to curb electricity losses.

Karnataka, which is home to several global and domestic technology firms, is plagued by a 25% power shortage which leads to poor quality power.

Krishna’s government, which came to power in October, has launched a drive to improve the power availability in the state and last month announced that power distribution will be privatised and foreign firms allowed to bid.

Kumaramangalam, who hailed the initiatives taken by Karnataka in signing the MoA, told reporters here that the state, by this pact, had ensured flow of 2000 mw of power from the central grid and about Rs 10,000 crore in financial assistance for system improvement projects including Rs 500 crore in grants.

He said the state was required to go in for a time scheduled energy audit to quantify the power generation and consumption. Kumaramangalam said at present Karnataka could account for only 37 per cent of its production, which he described as an unfortunate situation. Krishna said he was appreciative of the concerns of the centre in bringing reforms in the power sector.

Kumaramangalam said with the signing of MOA by Karnataka, the centre would request other states also to enter into such agreements. He said under the agreement, the centre would provide finance to an extent of about Rs 1500 crore, in the form of grants and loans, for a five year period between 2000-2001 to 2004-2005 for helping Karnataka strengthen its sub-transmission network by providing additional transmission lines.