Enron review panel may study MSEB functioning

By Mahesh Vijapurkar

MUMBAI, JAN. 12. As the Maharashtra Government debates the terms of reference of the panel to review the Enron-sponsored Dabhol Power Company's deal with the State Electricity Board (MSEB), there are indications that the functioning of the board and ways of improving it could be a part of the mandate.

It is not clear if the committee will be asked to tune the MSEB, with its public sector mindset, to deal with ``a liberalised economy'' since most of its funds in the future has to come from the private sector. If it does, it would be like re- inventing the wheel.

As early as in 1996, the Rajadhaksha Committee on the MSEB had made far-reaching suggestions, but it has received scant attention. Some of the suggestions were recognised not by the Government or the MSEB, but by the Maharashtra Electricity Regulatory Commission (MERC). For instance, the MERC wanted the ``user pays'' concept enforced by reducing subsidies. It wanted even farm pumpsets to be metered within three years. However, according to a knowledgeable source, this is unlikely.

Observers point out that if the Enron review panel is also asked to look into issues that have impacted adversely on the power utility rendering it virtually bankrupt, the comprehensive findings would force the Government to act. One name being tipped to find a place in the committee is the former Union Home Minister, Mr. Madhav Godbole, who was a member of the Rajadhaksha panel too.

The MSEB has a lot to do before it comes close to being financially viable again and the issues it needs to tackle require funds which is nowhere in sight. According to an official estimate, the MSEB will need Rs. 7,000 crores to cut line losses, renovate the existing generation plants and install meters. Another Rs. 6,000 crores is required to step up generation by 1,500 MW ``over a couple of years''.

According to the Energy Minister, Mr. Padmasinh Patil, the Government did not have that kind of resources and neither did the MSEB. ``If the people believe anymore in the MSEB, then perhaps finance can come through bonds issued to the public.''

But it will be an uphill task to give the MSEB a positive image because it has not been able to pay bills it had committed itself to honour.

At the moment, the MSEB is unable to find Rs. 400 crores required to buy and install new 25 lakh meters at the consumers' end - indicative of how substantial the unmetered supply is, especially to the farmers at Re. 0.42 a KwHr.

A key suggestion made by the Rajadhyaksha Committee was that the Government desist from interfering in the working of the MSEB. Even now, the MSEB is a victim of subsidies it is forced to give without a budgetary support. Apart from a recent conversion of about Rs. 1980 crores of outstanding loans to it into equity, the Government has done little else.

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