The Telegraph
Since 1st March, 1999
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Private entry into Assam power sector

Guwahati, March 21: Assam is set to sign a memorandum of understanding with Infrastructure Leasing and Financial Services Ltd (ILFS) for a joint venture company that could put the crisis-hit power sector on the fast track to self-sufficiency.

The Tarun Gogoi cabinet is likely to give the green signal to the draft agreement just after the ongoing Assembly session, which ends on March 30.

The MoU will pave the way for hydel projects with public-private participation, seen as the best way to end the prolonged power shortage in the state.

Apart from power, ILFS has interests in a broad spectrum of industry. It is one of the partners in the new company to which Tata is hiving off its tea plantation business.

Power minister Pradyut Bordoloi described IFLS as a “total solution company that is known for fast, progressive work”. He said the joint venture would help Dispur prepare a roadmap for hydel projects, raise funds and tie up all loose ends.

More importantly, the joint venture company could help Assam — a state where only 18 per cent of rural households have access to electricity —achieve the target of “power for all” by 2012.

Bordoloi, who compared ILFS with leading industry consultant McKinsey, said: “For us, it will be an event management group that will help Dispur on all fronts — from preparing a roadmap, mobilisation of resources to co-ordination”.

Assam produces only 120 MW on its own, as against the peak-hour requirement of around 800 MW. The state buys power from various sources.

Experts from ILFS will help the state in revamping the power distribution network, which dates back to the sixties. The joint venture company will initially be worth a token Rs 5 crore, but it is expected to grow rapidly in view of the immense potential of the power sector.

Admitting that the power distribution network required urgent attention, Bordoloi said it was designed to carry a load of only 550 MW.

Officials of the Assam State Electricity Board said the state would require over 800 MW more to meet the commitment of “power to all by 2012”. The peak-hour requirement in five years’ time is likely to be nearly 1,500 MW.

“Our power will come from a mixed bag of hydel and thermal projects. We will invite bids from private parties for small and medium hydel projects that can help the state attain self-sufficiency in power,” Bordoloi said.

Assam has only two large hydel units in operation — the Karbi Langpi hydroelectric project and the Ranganadi project. There are several mini projects, but the cumulative output is far short of the requirement.

A spokesperson for ILFL said the organisation’s role in the joint venture would be to “make projects commercially attractive for the private sector”.

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