MP power board to be split

Rs 1,100 cr ADB loan to be sought for improving distribution network

The Madhya Pradesh government has decided to split the state power board into five companies on June 1. Of the five companies, three will be electricity distribution firms, one power generation and the fifth a transmission utility company.

This was decided at a high-level meeting attended by Chief Minister Uma Bharti, state power board chairman Arun Gupta and chief secretary BK Saha recently, sources said. A formal order would be issued after the formation of new government at the Centre, he added.

Though the state government had already constituted the five companies, an official notification regarding terms and conditions for services and pension provisions for these companies is yet to be issued.

The meeting also decided to set up a pension fund for power employees and the chief minister donated Rs 1 crore to the fund, sources said.

The division of assets and services among the five companies will be decided at the next meeting, likely after the issue of the formal order. The chief minister assured the board that its liabilities would be settled before the split.

According sources, the state government has sought a Rs 1,100 crore loan from the Asian Development Bank (ADB) for the financial restructuring of the power board.

Though a detailed plan was yet to be finalised, the loan could be used for improving the distribution system to reduce the transmission and distribution losses, he said. The ADB has already sanctioned a $350 million loan to the MP State Electricity Board (MPSEB).

Meanwhile, the process of distribution of assets between MP and Chhattisgarh is likely to gather pace with both the states agreeing on the division of 36 public sector undertakings.

The panel set up by the Centre to go into assets division is likely to present its report on public sector undertakings to the Chhattisgarh government soon. Members of the committee and representatives of both the states will meet on May 25.

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Power agenda

• The state electricity board will be split into five companies on June 1
• The division of assets and services among the five companies will be finalised soon
• The chief minister has assured the board that its liabilities will be settled before the split