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

CHAPTER - 8
ASSAM
8.1 BACKGROUND, OBJECTIVES AND FACTORS LEADING TO
REFORMS
Assam has an area of 78438 sq km with a population of about 2.66 crore. The
State is largely agrarian with 87 per cent of its population residing in rural areas
and about 63 per cent engaged in agricultural activities and on tea plantation.
The population is spread over a large geographical area.
The Assam State Electricity Board (ASEB) was established in 1958 under the
Electricity (Supply) Act, 1948. The power sector has grown on the State’s
natural resources of oil, natural gas, and hydropower in the northeast. It has
been facing problems of inadequate capacity, inadequate investments and
operational problems due to poor maintenance and lack of fuel leading to poor
delivery of electricity service to about one million consumers.
The installed generating capacity of ASEB is 575 MW, out of which 300 MW
is thermal, 273 gas based and 2 MW hydel. However, effective capacity is
about 150 MW and operational capacity is 100 MW only. Assam has, however,
a share of 546 MW in the central power stations owned by NEEPCO and
NHPC. The AT&C losses in the ASEB system were about 45 per cent in 2004-
05. The electricity distribution system is over-extended. The transmission loss
was about 9 per cent and the system does not have sufficient capability to meet
ASEB’s demand though it has a network of 4,129 ckt km. Strategic
transmission links had to be developed to avail of the energy from the Central
Sector generation projects coming up in the region. Energy available was 3,302
MU and sold was 2,037 MU. Losses of the Board, without subsidy, were Rs
1,088 crore in 2004-05. Net worth has been eroded and is in negative at Rs
3,584 crore.
ASEB has not been able to meet its operational requirements due to high
losses, poor bill collection and un-remunerative tariffs, resulting in poor
creditworthiness. The continuing cash shortfall has led to insufficient and
inadequate maintenance of the existing system. The State’s budgetary resources
were no longer available to support the operation of the power sector as
hitherto.