Maharashtra to open up power supply sector

The state has cleared the decks for private sector participation in the power sector. The government has decided to hand over the power supply of Pune, Navi Mumbai, Thane, Nagpur and Nashik, thus far serviced by the Maharashtra State Electricity Board (MSEB), to private players.

Sources said that the government is expected announce this decision on the floor of the state legislature on Tuesday. While the Mantralaya was understandably tightlipped, the state Cabinet is believed to have also decided to give incentives for those private sector power utilities setting up power generation plants in Maharashtra.

"Currently, the state government has chosen not to announce the circles it will offer to the private sector. However, Pune, Nagpur, Nashik, Aurangabad and Navi Mumbai are actively being considered to be opened up for private sector," the sources said.

The state government's proposed plan is in keeping with its stated objectives of unbundling the MSEB and reducing the acute power shortage.

By offering lucrative sectors such as Pune to private players, the government hopes that MSEB can concentrate on the rural areas of the state.

"As MSEB supplies the cheapest power in the state it makes more sense to divert its power to the subsidised rural sector than MSEB purchasing costly power from a private utility and then supplying it to the subsidised farm sector," the sources added.

However private players, who get lucrative circles such as Pune and Navi Mumbai, will have to pay an electricity duty. This will act as the compensation for MSEB after it stops supplying power to these regions.