The World Bank has asked Andhra Pradesh to conform to a tight schedule for its economic reforms process.
Edwin Lim, country director of World Bank, has met Chief Minister N Chandrababu Naidu and emphasised the need to persue the reforms package as per schedule. Lim is understood to have assured Naidu of a $1 billion (Rs 3,600 crore) loan for restructuring the power sector. The loan will be provided in three tranches, with the first tranche being available by November-end, subject to the state pushing through the necessary legislations.
The bill for implementing power sector reforms is ready and will be moved in the winter session of the state assembly, beginning on November 17.
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The Bank is keen that the proposed regulatory commission become fully operational by the end of February next year, when the second tranche will be released. The final instalment of the loan will be released by the end of 1998.
The Bank wants the new power tariff for agricultural users to become effective by January 1998. It also wants at least 50 per cent of the distribution to be in the hands of joint ventures by the end of 1998.
While the Bank will provide $500 million, the remaining $500 million will represent co-financing from other financing bodies like ODA and OECF.
The Bank has emphasised that the loan should be utilised only for the purchase of fresh equipment. However, it will provide retro-active financing if the procurement is made as per the Banks bidding process.
The Bank has also indicated a loan of $560 million in six other areas