The power ministry will finalise a policy for attracting private sector investments in power distribution by April, 1998, power secretary E A S Sarma said yesterday.
At a Confederation of Indian Industry (CII) workshop on transmission and distribution (T&D) here, Sarma said the power ministry was currently working on the recommendations made by the high powered committee on power distribution, headed by S J Coelho.
The workshop was also addressed by Union power minister Y K Alagh and Coelho.
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Both Coelho and Sarma felt privatisation should not be viewed as the sole way of improving power distribution, especially in light of the opposition from state electricity boards (SEBs).
Coelho said the private sector should be absorbed into the system instead of being treated as a replacement for the existing system.
At present, almost the entire power distribution in the country is under the state electricity boards .
He said there was no universal model that could be recommended to the SEBs, and that each SEB would have to adopt a model that suits it the best.
Elaborating on Coelhos statement, Sarma said the solution to the power problem lay in evolving an integrated plan to address energy efficiency along with T&D.
Sarma said the huge investments being envisaged for the power sector would not be required if the government paid more attention on improving the existing T&D system.
He added the investments required in T&D alone was much higher than that required in power generation because of two reasons.
One, the huge backlog that has accumulated due to low investments in T&D.
Two, the growing investments in power generation would require a commensurate investment in T&D.
Sarma also added that with the exception of Cogentrix and Daewoo, who are promoting 1000-mw power projects in Karnataka and Madhya Pradesh respectively, promoters have not paid attention to transmission.