In a feat to turn around the operational integrities of the money losing operations, the central government of India is encouraging the incapable power firms of the State to seek private collaborations. Private partnerships will ensure appropriate distribution of power to all consumers across the country as was expressed by a top bureaucrat of the union power ministry.
There are several state run power plants that lose more than 15 percent of the power generated owing to the bad quality of electrical utilities. Power is also lost due to decay in old networks, theft and procrastination in collections and billing. By seeking private collaborations, the central government hopes to bring about the next wave of power reforms in the country as has told to media by Rajiv Nandan Sahai, Power Secretary in New Delhi.
It has been since 2015 that the central government has started practices for private partnerships in the power generation and distribution sector. Inefficiency in the state run power generation and supply corporations have been detected, the primary reasons for which were selling of electricity at subsidized prices and delay in payments to generators which not only affected the power generation as a whole, but also was responsible for insufficient distribution of electricity in many regions across the country.
Sahai also said that the state governments must also tend to their respective duties in order to make this plan a success.
“There is enough private capital ready to invest in distribution, provided the states ensure a risk-free business,” he said. “States need to pay subsidies on time, government departments need to make timely payments of their electricity bills and political interference in operations needs to go.”
Giving example of Tata Power Co. that has acquired a energy utility unit in the state of Odisha last year, Sahai said that there have been examples like these that have helped in appropriate power generation and supply in many cities that include Kolkata, New Delhi and Mumbai among few others.
“We expect a substantial reduction in subsidy burden by bringing in private management of discoms,” said Bishnupada Sethi, Principal Secretary for energy in eastern state. “The new management is expected to bring down the losses and turn around the discoms. That will improve supplies to people, which is what the government wants.”