Report of Indian Institute of Public Administration ... - Ministry of Power

Orissa
(Injection of capital to strengthen the distribution system launching a special
drive to collect arrear dues and introducing energy audit at all levels are the
urgent needs.)
Action taken on the Kanungo Committee’s Report
Government of Orissa had constituted a Committee of Independent Experts to review
Power Sector Reforms in Orissa on 30 May 2001. This Committee, known as the
Kanungo Committee, had submitted its report to the State Government on 2
November 2001.
After taking into consideration the recommendations of the Committee of independent
experts and the correctives suggested by OERC, the State Government issued orders
on 29 January 2003. The salient points are as follows:
(i) The effect of up-valuation of assets of OHPC and GRIDCO indicated in
Notification No. 5210 dated 1 April 1996 and No. 5207 dated 1 April 1996
would be kept in abeyance from 2001-02 prospectively till 2005-06 or the sector
achieves a turnaround, whichever is earlier, to avoid re-determination of tariff for
past years and also re-determination of assets of various DISCOMs. For this
purpose, depreciation would be calculated at pre-1992 norms, notified by
Government of India.
(ii) Moratorium on debt servicing by GRIDCO and OHPC to the State Government
would be allowed from 2001-02 till 2005-06 except the amount in respect of loan
from the World Bank to the extent the State Government is required to pay to the
Government of India.
(iii) The outstanding dues payable to OHPC by GRIDCO till 31 March 2001 on
account of power purchase would be securitised through issue of Power Bonds
by GRIDCO to OHPC.
(iv) GRIDCO and OHPC shall not be entitled to any Return on Equity till the sector
become viable on cash basis, or 2005-06, whichever is earlier.
(v) Under conditions of normal hydro availability and the State becoming surplus in
power, GRIDCO may take steps for export of power to other States. GRIDCO
would take steps to procure cheap power from CPPs like NALCO and ICCL.
OHPC and OPGC may be allowed to undertake third party sale outside the State,
subject to permission from appropriate authorities.
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