Power Ministry's Cabinet note on POSOCO to be finalised this month

NEW DELHI: The power ministry is expected to finalise the Cabinet note by this month-end on the proposal of hiving-off POSOCO, an arm of state-run Power Grid Corporation, into a separate entity.

It is awaiting a response from the Finance Ministry's EFC (Expenditure Finance Committee) before moving the Cabinet.

"The proposal will go to EFC and then we will go to the Cabinet for clearance. The entire exercise is likely to be done by the end of January," an official in the Ministry of Power told PTI.

EFC will discuss the proposal at a meeting that will be attended by the representatives from the Power Ministry as well as the Planning Commission.

"Once it (proposal) is vetted by EFC it will go to the Cabinet," the official said, adding that EFC will mainly look into the financial aspects of the proposed company.

Power System Operation Corporation Ltd is a wholly-owned subsidiary of central transmission utility Power Grid Corporation.

The proposal aims at providing greater autonomy to POSOCO.

Senior Director at Deloitte India, Debasish Mishra told PTI: "Typically the system operator in any liberalised power market is an independent entity. This ensures impartial operation of the system.

"In India, Power Grid Corporation has been the transmission utility as well as system operator."

As India has a significant number of private transmission utilities, it is important that their roles are separated and POSOCO is made an independent entity, he added.