KSEB declines Centre's proposal for privatisation; power charges likely to go up

Thiruvananthapuram: The Kerala State Electricity Board has decided to borrow an additional loan from the centre without privatising the power supply. But it is learned that the electricity charges will go up with this move. The board also informed the government to clear the arrears.

Earlier, the central government informed that states will be allowed to borrow additional loan in proportion to half percent of the GDP if each state confirms to follow the recommended reforms in the power sector.

Apart from this, the government should take over the loss of the board. The centre also proposed the states to privatise the power supply for receiving the additional loan.

The additional loan will be granted for a period of 4 years. Hence, Kerala will get Rs 4800 crore in a year. But the state government should sign an MoU agreeing to take over the financial liability of KSEB.

Finance additional secretary RK Singh and KSEB chairman NS Pillai held talks to examine this proposal. The chairman informed that KSEB has the performance excellence to be eligible for the scheme without privatising the supply and switching to the smart metre.

In this year, KSEB incurred a loss of Rs 1750 crore. Pay revision and additional fund allocation to the pension fund are the reasons for the loss.

But the Electricity Regulatory Commission has confirmed that the board already has an income deficit of Rs 6800 crore which should be cleared through power charges.

The board has sought permission for collecting the power charges without giving an extra burden on the consumers. Apart from this, the board also demanded the government offices and water authority clear the payment immediately.

A decision regarding this will be taken by the cabinet soon. The state should inform the decision to the centre within December.

Meanwhile, finance minister KN Balagopal declared that the additional loan to revive the power sector will be received from the centre only if it favours the state’s interest.