Godbole panel says unbundle MSEB or perish

Vol 5, PW 11 (18 Jul 01) People & Policy

Split up the Maharashtra State Electricity Board or perish! So recommends Part-II of the 'Godbole' Energy Review Committee in its report to Maharashtra Chief Minister Vilasrao Deshmukh on July 11th.

A 15-page summary was handed to media ahead of the planned public availability of the original at a future, unspecified date. Part-I of the Godbole report,submitted last February, came out harshly on the Dabhol contract.

Part II proposes the following to reform the MSEB: Unbundling the MSEB into separate generation companies, a transmission company and a distribution business. The panel recommends MSEB be split up into six generation companies,and that these should be corporatised as a single state-owned entity called: Maharashtra Power Corporation Ltd. This, argues Godbole, could be the nodal agency for the states share of central sector generation, such as power from National Thermal Power.

Godbole feels it would be prudent to retain transmission and system co-ordination services under state ownership, so as to ensure fair and equitable access to these services. The Maharashtra Energy Regulatory Commission shall regulate prices charged by the transmission entity.

Godbole recommends that over time, the operation and maintenance, but not the ownership of these facilities can be handed over to the private sector in a gradual manner. Progressive privatisation of the distribution companies figures in the second phase of reforms envisaged by the Godbole panel.

Godbole suggests setting up a Power Sector Reform Fund into which proceeds of the privatisation process, loans from multilateral agencies and power sector restructuring grants from the government of India should be credited.