Panel moots insulating reforms from politics

new delhi: efficency in the power distribution sector can be restored only by insulating it from political compulsions, a high-powered committee report on introducing reforms in the distribution sector has said. as reforms in the distribution sector are primarily the prerogative of the state, the committee has emphasised an urgent need for the states to delineate and crystallise the strategy to be followed for reforms in distribution. the committee, which was formed to study the issues related to the distribution sector including privatisation of distribution, submitted its report to power minister suresh prabhu here today. the panel was headed by power secretary a k basu, according to a press release issued here today. the committee recognised that a number of important suggestions have been made in the past for improvements in the distribution sector, but the implementation of the suggestions has been uneven across the country and significant progress towards attainment of efficiency gains is yet to be made. the aim should be to commercially orient the sector and provide quality service at reasonable price to all consumers, says the panel. states may take a view to consider a model for good governance within the existing framework like corporatisation of the electricity board, the committee said. however, “the success of the strategy would depend on the insulation of the sector from the dysfunctional compulsions of the political process, which considering the past would be strong challenge�, it said. however, the bottomline would be that the sector must achieve commercial viability in two to three years. based on the international and domestic experiences of states, which have already undertaken the reform programme, the committee suggested a time bound action plan for reform in the distribution. the actions include: improvement in efficiency of operations, increased accountability of the state utilities, rural electrification and privatisation of the distribution business. for privatisation to be successful, considerable amount of preparatory work would need to be undertaken preceding privatisation with a view to creating a conducive environment. the committee has indicated that privatisation of distribution would include adopting an appropriate model and a suitable independent regulatory system. further, the pace of privatisation would depend upon the model adopted, the committee said pointing out that experience in orissa and other states also should help in highlighting issues that need to be thought of for an appropriate investment framework. “the process of distribution privatisation would necessarily have to focus on resolving the transition issues related to distribution operations such as past losses, receivable and subsidy,� the committee suggested. the action points recommended by the committee in the three segments of the strategy include metering, distribution circle management and anti-theft legislation to be completed within the six months pertaining to improvements in efficiency of operations. the committee suggested that the centre should incentivise the states to undertake reforms by linking reforms initiatives with the activities of cpsus like ntpc, pgcil and nuclear power corporation.