Power utilities should be freed from political interference: World Bank
27/02/2015
Mohali: To enhance competition and accountability in the energy sector, state power utilities and regulators should be 'freed' from political interference, according to a study report by the World Bank.
It also points out that the state governments in India need to give greater operational autonomy to their power utilities and regulators while holding them accountable for performance if the sector is to move to a higher level of service delivery.
The study 'More Power to India: The Challenge of Distribution' -- a review of the country's power sector across key areas of access, utility performance and financial sustainability -- was conducted at the request of the Union Government, Economic Advisor, World Bank and author of the report, Sheoli Pargal, told reporters here today.
"A commercial operational culture has still not been achieved across a wide set of state utilities nor have the concomitant improvements in sector performance that were anticipated resulted," she said, pointing out this is despite the unbundling and corporatisation of State Electricity Boards and the establishments of State Electricity Regulatory Commissions (SERCs) following the Electricity Act of 2003.
"Lack of accountability, limited autonomy and constrained technical capacity have restricted the ability of the SERCs to create an independent, transparent and unbiased framework for the sector that balances consumer, investor and utility interests," it says.
The report points out that only 15 percent of 67 utilities studied (across India) have the Department of Public Enterprises (DPE) recommended share of independent directors, and several entirely lack independent directors.
"As of 2014, neither Punjab nor Himachal utilities had any independent directors on their boards; government directors were more than two in Punjab, Himachal and Haryana (consistent with the DPE guidelines)," it further says.
The study also says that regulator needs enough professional staff and IT resources and greater transparency for improved public participation into the regulatory process.
"Data shows that regulators in Punjab and Haryana depend entirely on the state for their budget allocations, while Himachal Pradesh generates two-thirds of its budget from its own revenues. Average chairman tenure in Haryana is less than three years while it is five for Punjab and Himachal Pradesh," Pargal said.
Share This Story |
|
Comment On This Story |
|
|
|
|