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Home / India News / 2007 / May 2007 / May 28, 2007
Manmohan Singh asks states to ensure free flow of power to paying consumers
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Manmohan Singh asks states to ensure free flow of power to paying consumers

Prime Minister Dr. Manmohan Singh on Monday asked the States to encourage the utilisation of transmission and distribution corridors to ensure free flow of power to any consumer, who is willing to contract for the power.

New Delhi, May 28 : Prime Minister Dr. Manmohan Singh on Monday asked the States to encourage the utilisation of transmission and distribution corridors to ensure free flow of power to any consumer, who is willing to contract for the power.

Addressing the conference of chief ministers on the power sector, Dr Singh said, open access in transmission and distribution, and competition is the key to improved power supply and greater investment in the power sector.

"We have to look closely at all regulations to ensure that there is 'Open Access' in transmission and distribution. State policy has to proactively encourage the utilisation of transmission and distribution corridors to ensure the free flow of power to any consumer who may be willing to contract for the power," he said.

Dr Singh also asked the States to encourage bulk consumers to source their requirements from alternative suppliers.

"States need to actively encourage bulk consumers to source their requirementsrom alternative suppliers so as to increase the total availability of electricity in the system, especially for the household and farm sector," he said.

The conference is aimed at finding practical solutions to the problems in the power sector.

There is an energy shortage of around 10 percent and a peaking shortage of over 13 percent. There are states whose peaking shortages touch 25 percent.

"Shortages of this magnitude can be a serious impediment to economic activity," said Dr. Singh.

Observing that the current level of losses in transmission and distribution, range between 30-45 percent in many states, which threaten the financial health of the sector, Dr Singh offered Central assistance to the States that are able to reduce these losses to agreed levels.

Expressing concerns over the inability to attract private investment in power sector on a significant scale, Dr. Singh said, "The key to attracting investment, particularly from the private sector, lies in ensuring open access to consumers. It will encourage investment. It will also put competitive pressure on the incumbent utility."

He said lack of competition results in inefficiency, which in turn manifests itself in the form of high tariffs, poor standards of consumer service and low internal resource mobilisation.

Dr Singh called for investment both in capacity addition and in upgrading the transmission and distribution systems.

One estimate, he said, has put the figure at over Rs 600,000 crores.

He also expressed the need for a crash programme for capacity addition aimed at eliminating shortages by 2012.

"We need to take steps to meet these capacity addition targets without any slippages or overruns," he added.

Besides Chief Ministers and power minister of the States, Union Power Minister Sushil Kumar Shinde, Union Finance Minister P. Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia were also present at the conference.

The National Development Council will meet tomorrow to discuss fresh approaches to agriculture.

ANI

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