India Power Sector Reforms Update 1

TNI

July 2005

India Power Sector Reforms Update 1
Prayas, Pune (India) October 2001

Since 1990s. several countries have embarked on fundamental restructuring of the power sector. This restructuring typically involves moving from integrated, monopoly utility structure to competitive industry structure and shift from government / public owned utilities to private utilities. Several groups such as NGO's, Environmental Groups and utility workers' unions have pointed out severe and fundamental flaws and dangers in these restructuring efforts . Often one can find striking similarities in the restructuring path adopted by different countries, critique of the same by various groups as well as the implications of the same.

Further, main stream institutions such as multilateral institutions (the World Bank and other Bretton Woods Institutions), financial institutions and multinational companies have been able to learn from these developments across the globe and to evolve effective responses to these developments. Unfortunately, the civil society groups which are highly critical of these reform processes have little resources to keep track of developments around the globe and to learn from the same. India Power Sector Reforms Updates is an attempt to fill this gap.

This is a joint initiative of Prayas, an Indian NGO based in Pune, working on power sector issues for a decade and Public Services International (PSI) which is an international trade union federation, uniting public sector workers in more than 500 trade unions in over 140 countries. Our aim is to continuously monitor the developments in Indian power sector and communicate the same to wider audience of civil society groups and utility workers' unions around the world. Considering the limited resources of Prayas and PSI compared to the great diversity in power sector restructuring in different Indian states we will be concentrating on three Indian states of Orissa, Andhra Pradesh and Uttar Pradesh shown in the following map. These updates, tracking developments in these states will be published every quarter. Please direct your suggestions and comments to PSI at psiru@psiru.org.

First issue of the Update is aimed at developing a base line information about the Indian power sector and the three focus states. Part I of the update gives an overview of the Indian Power Sector to facilitate better understanding of developments in the three states. Annexure I lists some websites giving useful information about the Indian power sector, which would be useful for further understanding and research of Indian power sector. Annexure II contains glossary of terms used in the updates. Parts II, III and IV of the update contain reports about the states of Orissa, Andhra Pradesh and Uttar Pradesh respectively. Subsequent issues of the update will cover developments in these three states in the preceding quarter.

Contents

Overview of the Indian Power Sector

Pre-Reform Structure
Independent Power Producers (IPPs)
Unbundling, Privatisation and Independent Regulation
Major Issues in the Indian Power Sector
Annexure I: Some Useful Internet Resources for Information on Indian Power Sector
Annexure II: Glossary