Power sector reforms caught in power politics

But if it does, the Government will have to incur the wrath of the strong farm lobby, represented by the ruling Bharatiya Janata Party8217;s very own BKS. Senior BKS leaders at the recent massive rally in Gandhinagar threatened to launch an agitation if the Government implements any directive of the Gujarat Energy Regulatory Commission GERC to hike the tariff.

The GERC8217;s award, which was to come in mid-April, is now expected by month-end. The GERC firmly denies that it is under any pressure, but official sources claim that the ruling party had impressed upon the commission to announce its award after the elections to the municipalities and the panchayats, lest it might affect the BJP8217;s poll prospects.

The BKS blames the GEB for the mess it is in and does not wish to accept any burden on the farmers, glossing over the fact that the farm sector gets a huge power subsidy to the tune of Rs 1,100 crore. The rich farmer lobby was also into power theft.

quot;The Gujarat Government will need a lot of political will to tell all this to the BKS, before or after the elections,quot; said a senior bureaucrat, adding the Government has no option but to initiate the reforms and quot;implement harsh measuresquot;.

The ADB wants the Government to do three things: revise power tariff through the GERC; pass a regulation facilitating the reforms process and unbundle the GEB.

The tariff revision, to be made by the GERC, is fraught with political implications. Since the Government is legally bound to revise the tariff as the GERC says, it will have to continue the farm subsidy, if not increase it, to match the tariff revision. Here, the ADB will disagree. Otherwise, the farmers will protest.

On the regulation to initiate the reforms process, the Government is learnt to have told the ADB mission, which was here last week for the wrap-up meetings on the first tranche of 250 million loan, that a bill to this effect will soon be approved in the State Cabinet.

To be called the Gujarat Electricity Industry Bill, 2000, the bill will then be sent to the Centre for approval. Later, it will be passed in the State Assembly either in the monsoon session or the budget session in February-March.

Unbundling the GEB will mean splitting it into separate companies for generation, transmission and distribution. Here, the GEB staff has already registered its protest and extracted a promise from Chief Minister Keshubhai Patel that they would be taken into confidence before any such move. Secondly, the Government is learnt to be under pressure from GEB chairman Nalin Bhatt against splitting.

For generation, the Government has already formed the Gujarat State Energy Corporation GSEC and there are independent power projects in operation in the private sector. For transmission, the Government is in the process of forming the Gujarat State Transmission Corporation.

But, nothing has been done as yet in the crucial area of distribution where the power theft takes place and where the farm sector draws unmetered supply. quot;The Government needs to privatise this aspect, even if it means inviting protests from the GEB staff as well as the political authorities of the board,quot; a senior official explains.