JK Power Sector on Way of Privatization?

Marouf Ahmad/Kashmir Observer
Srinagar: Faced with herculean challenge of reducing power loss by thirty percent in next three years to prevent transfer of “grants into loan” under centrally sponsored scheme—APDRP, the government has hired services of a New Delhi based company, CNC limited, to meet the deadline.
Chief Engineer, maintenance and rural electrification (M&RE), Mushtaq Ahmad Shah said that central government and government of Jammu and Kashmir have recently inked an agreement to reduce the power loss by thirty percent in next three years.
According to the agreement, he said, government has agreed to bear as loan the funds granted to state government under Accelerated power Development Reforms Programme (APDRP), if it fails to reduce the power loss by thirty percent in next three years.
To meet the deadline, he said, the department decided to consult the Delhi based firm and eventually CNC—a consultancy of TATA group—was chosen through open tender system.
“The nodal agency, Power Finance Corporation, empanelled a list of 21 consultancies and following the tendering, the firm had quoted least rates and the contract was accordingly allotted to it,” he added.
Sources said that 30 towns across the state, including two in Ladakh division, have been identified to be handed over to the private company for reducing the power loss. “The towns were identified on the population as per 1981 census and those with above ten thousands population were brought under its purview,” they added.
Sources said that state government has decided to reduce the loss by ten percent every year to meet the deadline.
Pertinently, following the lack of accountability, government closed the scheme under APDRP. It was recently converted into Restructured APDRP.
The latest move has been seen as forerunner to the privatization of the power sector of the state.
If sources are to be believed, the government would adopt franchise system where private players will buy power from the departments and distribute in to the consumers.
They said that privatization will help the state to streamline management of the critical infrastructure and overcome staff shortage and corruption at lower levels.
Earlier in June, Chief Minister Omar Abdullah had asked PDD to study models of privatization of electricity distribution in various parts of India.
In 2008-09, the transmission loss was recorded at 4, 425.10 metric units with nearly 3 lakh unregistered connections. The agreement load in 2008-09 in the state was 1969 MW with number of the consumers of all categories standing at 1216 lakh while the demand of power in the same year was 2120 MW.
Energy purchase in the same period was recorded at 9147 MW, which cost over 1600 crore to the state.
Officials said peak demand in the state during 2009-10 is estimated at 2247 MW against availability of 1545 MW, which leaves a deficit of 702 MW.
The Minister of State for Power Shabir Ahmad Khan recently said that Valley’s daily power consumption was 1,250 MWs and government has to purchase 700 MWs of power from Northern Grid.