Cabinet to put seal of approval on restructuring of PDD

Mohinder Verma
JAMMU, Aug 29: State Cabinet, which is meeting tomorrow morning under the chairmanship of Chief Minister, Omar Abdullah, is likely to put its seal of approval on the restructuring and unbundling of Power Development Department whereby one State Transmission Company and two Distribution Companies would be set-up to achieve varied objectives including ensuring uninterrupted power supply and improving the financial health of the Department by controlling Transmission and Distribution (T&D) losses.
Authoritative sources told EXCELSIOR that State Government has availed the Central assistance in the form of power reforms grant and signed three Tripartite Memorandum of Understandings (MoUs) with the Union Ministry of Finance and Planning Commission to avail further assistance.
“The benchmarks set out as part of first two MoUs have not been achieved to a large extent as such the State is in the process of ensuring compliance to the 3rd tripartite MoU, which entails bringing in reforms in the electricity sector and restructuring of PDD”, they said, adding “the reforms are necessary for the survival of power sector itself as apart from being dependent on the State Budget, the power sector is not able to undertake any expansion of routine maintenance on its own. This has led to huge customer dis-satisfaction and uncertainties in attracting industrial and commercial investment”.
Keeping in view the recommendations of Tara Energy Research Institute (TERI) and Pricewaterhouse Coopers (PwC), which were engaged by the Government to study and prepare a report for turnaround of power sector (T&D), the Government has decided to restructure and unbundled the Power Development Department, sources said, adding “the restructuring is required to address inefficiencies including high T&D losses, low collection efficiency, low per capita consumption, increasing gap between costs and revenue and worsening financial health besides incapability to raise funds due to negative net worth and poor financial health of the Department”.
As part of restructuring and unbundling, one State Transmission Company and two State Distribution Companies, one each for Kashmir and Jammu Divisions and one holding company would be established, sources said, adding the restructured companies will have to strive towards achieving objectives of an uninterrupted supply of safe and affordable power, complying with performance standards as approved by the regulators, a transparent, accurate and timely billing system with proper working meters and convenience payment options and a prompt service in grievance redressal.
“Moreover, the successful implementation of various schemes like RGGCY, APDRP and R-APDRP hinges on clear allocation of responsibilities and effective management of contracts and investment, which is possible through unbundling of PDD and creation of focused departments within revised organization”, sources said.
In response to a question, sources said, “an expenditure of Rs 125 crore would be required for unbundling and restructuring of PDD”, adding “since detailed exercise in this regard has already been carried out, the Cabinet is likely to put its seal of approval on the proposal of the PDD, whose administrative control is with the Chief Minister, Omar Abdullah”.
Sources said that Cabinet is also likely to issue directions for finalizing the modalities of making required funds available equivalent to the amount of local taxes charged by the Finance Department to JKSPDC and NHPC through PDD for completion of ongoing schemes under RGGCY by September 2012.
The Cabinet will also take decision regarding revision/re-notification of the Right to Information Rules, 2010 and setting up of Wular Conservation and Management Authority.

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