Power Deptt. to introduce Rural & Urban Franchise 

Guwahati, May 8: In a move to plug the loopholes in the power sector, the Power department has mooted a proposal for introduction of rural and urban franchises through a cabinet memorandum. The proposal will be placed before the state cabinet for consideration and debate. 

Assam power minister Pradyut Bordoloi informed this to the newsmen that they will also place before the cabinet the opinion of some experts that three distribution companies of the state-owned Assam State Electricity Board (ASEB) should be amalgamated into one entity. 

After the power reforms of 2004, the ASEB had altogether five companies, one each for generation and transmission and three for distribution. The proposal for amalgamation would be put forward for cabinet discussion as there has been a feeling that there is duplication of work and three companies have not met the expectation of the people, explained the minister. 

He said that nearly electrification of 25,000 villages under the Rajiv Gandhi Grameen Vidyutikaran Yojana is on the pipeline. Huge manpower would be required to handle the billing and doing the servicing of these electrified villages and therefore planning is on to initiate franchise model to reach out to the people. Already the franchise model is rendering service in Nagpur and two cities of Madhya Pradesh. 

 The minister said that local management, servicing including the fault repairing, billing and recovery and connection will be outsourced from ASEB to this franchises. However, all the assets will remain with ASEB, he informed. 

Prior to the reform programme, the aggregate power loss (including transmission, distribution, and commercial and generation loss) of ASEB was about 50 percent and annual loss of the ASEB was about Rs 480 Crore. After almost four years, the aggregate loss has come down to 40 percent. 

He, however, warned that the government will not hesitate to bring in private players for distribution, if required. "The state government has got US $ 250 million loan from Asian Development Bank (ABD). A large sum of it was used to upgrade the outdated transmission network. Now the state government is negotiating for another US $ 300 million loan from ADB," he added.