Mohinder Verma
JAMMU, July 15: Started four years back in order to increase efficiency, accountability and reduction of losses in power sector, the much-needed unbundling of the Power Development Department has been put in the cold-storage despite the fact that Union Power Ministry as well as Jammu and Kashmir State Electricity Regulatory Commission (JKSERC) have put enough weight behind this imperative exercise.
Official sources told EXCELSIOR that following repeated instructions from the Union Power Ministry, the Jammu and Kashmir Government initiated the process for unbundling/ restructuring of the Power Development Department (PDD) in the month of October 2010 by inviting bids for hiring consultancy services for the task.
Following detailed exercise spread over two years, the Government vide Order No.264-PDD of 2012 dated September 5, 2012 ordered for unbundling of Power Development Department and setting up of one Transmission Company, two Distribution Companies (one each for Jammu and Kashmir divisions) and one Power Trading Company.
Thereafter, vide Government Order No.285-PDD of 2012 dated September 21, 2012 four companies with the title—J&K State Power Transmission Company Limited; J&K State Power Trading Company Limited; Jammu Power Distribution Company Limited and Kashmir Power Distribution Company Limited were incorporated in order to achieve the objective of increased efficiency, accountability and reduction of losses in the power sector.
Even PWC was hired as consultant to assist the Power Development Department in framing the complete corporate structure of the incorporated companies along with the migration plans and accordingly a blueprint was prepared.
But thereafter the political interventions started in this vital exercise as a result of which no further progress could be made to take the unbundling exercise to the logical conclusion despite the fact that the same is also a legal requirement under Jammu and Kashmir Electricity Act, 2010.
Stating that not only previous but even the present dispensation has put the much needed exercise in the cold storage, sources said, “Jammu and Kashmir is among the very few States in the country which has not completed the unbundling exercise despite repeated directions from the Union Ministry of Power and Jammu and Kashmir State Electricity Regulatory Commission”.
“When the Power Development Department’s Tariff Proposal for the current financial year came up for hearing before the Electricity Regulatory Commission, the department was asked to explain the progress report on unbundling exercise but the authorities of PDD failed to give any convincing reply”, sources said.
Observing that PDD has failed to provide separate details of assets and costs for each unbundled function of the department, the Commission while stating that unbundling is one of the major restructuring and reform measure as per the J&K Electricity Act, 2010 stressed that exercise should be completed at the earliest so that the incorporated companies could be made functional in the interest of the increased efficiency, accountability and reduction of losses.
However, the PDD explicitly told the Commission, “the blueprint is almost complete but further directions of the State Government are awaited without which no progress can be made on unbundling exercise”. This clearly establishes that unbundling has been put in cold storage and nobody knows whether this step would ever reach the logical conclusion.
It is pertinent to mention here that unbundling will also facilitate in increasing revenue generation, which otherwise continues to paint dismal scenario with huge gap between expenditure on purchase of power and revenue realization.
The objective of separation of power transmission from the integrated operations is not only organization transformation to a new public service delivery paradigm in the successor entities but also to build a greater focus on the distribution aspect. It also allows for independent functioning of each segment of the sector and provides operational, managerial and functional autonomy to successor utilities to enable them to operate on commercial lines.
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