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The States which achieve 90 per cent and above for compliance with the APDRP targets would be categorised in the " very good ", while States falling below 50 per cent would be treated as under-performing regions, he added.

BANGALORE, Oct.17

THE Ministry of Power has held out the threat of withholding disbursement of funds and investments by Central power undertakings, if States failed to comply with the energy reform guidelines prescribed under the Accelerated Power Development and Reforms Programme (APDRP).

The Power Secretary, Mr R.V. Shahi, said here today that accordingly States would be expected to report aggregate losses in the power sector instead of distribution or transmission losses. Currently, the States were reporting only technical and commercial losses, Mr Shahi said speaking at a conference on power sector reforms organised by the Independent Power Producers Association of India.

The APDRP would stress on reducing losses of utilities, he said. Accordingly, utilities would be expected to comply with deadlines for loss reduction. Half of the losses reduced through such savings would be given to the States as incentives. Approximately, Rs 30,000 crore would be released to the States under the APDRP programme, he added.

However, in such loss reporting, Mr Shahi said that the figures submitted by the States would be independently audited by the Power Ministry before the incentives are released.

In addition, the Centre has also appointed the rating agencies, Crisil and Icra, to carry out assessments of power sector reforms in the States. The States which achieve 90 per cent and above for compliance with the APDRP targets would be categorised as " very good ", while States falling below 50 per cent would be treated as under-performing, he added. Through this, utilities would be made more accountable, he said. The agencies would announce the ratings by the end of this month.

The States that top will have the benefit of additional investments from public sector entities like the National Thermal Power Corporation and the PowerGrid Corporation of India (PGCIL). Besides, the utilities in the performing States would be supported by lenders like Power Finance Corporation and Rural Electrification Corporation.

Mr Shahi said that the States' contention that rural sector was responsible for the losses was not acceptable. The APDRP would seek to improve the collection efficiency of the State utilities by completely eliminating fictitious billing. He said that such billings had resulted in inflating the income levels of State utilities, though the realisation remained very low. In fact in some of the States, he said the realisation was as low as 35 per cent of the billing. For this purpose, the Ministry of Power had identified 700 towns in the country for the implementation of the APDRP-based reforms.

Last year, at least six of the States had failed to comply with the APDRP guidelines, which included tariff rationalisation. These included States such as Punjab.

However Punjab, Mr Shahi said, had now agreed to put in place tariffs for farmers in a bid to effect turnaround of the power utilities. He said that reforms were aimed to affecting a complete turnaround in the sector over the next three to five years.

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