The expert group on reforming the State Electricity Boards (SEBs) is believed to have recommended a long-term tariff mechanism instead of year on year basis along with options to consumers for sourcing electricity from different generators to ensure competition in power sector. Reforms have to be given a new thrust. Merely unbundling of SEBs and privatisation of distribution will not help as is the experience in the case of Orissa. "We need to introduce competition through open access network and provide an investment stability through multi-year tariff," Montek Singh Ahluwalia, who headed the task force, said.
It is very clear that reforms are needed but the Orissa experience is being misread to assume that reforms do not work. Reforms can work but they have to be carefully caliberated, he said. Singh completed his recommendations before going to IMF on Tuesday for taking new responsibilities and the same would be submitted to group of ministers on power after compilation of the draft later this week.
Speaking on the recommendations made in the second part of the report on SEBs, Ahluwalia said that the expert group was in favour of open competition in the power sector. "We are replacing state monopoly with private monopoly while elsewhere in the world the dominant push has come from the introduction of competition. We need to move from the present single buyer network to open access network," he said.
Bureau Report