Rationale for Karnataka State Power Sector scoring - Ministry of Power

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KARNATAKA PERFORMANCE SCORESHEET Max. score Actual Remarks I External Factors 40.0 27.5 A State Govt related parameters 20.0 12.5 A 1 - Existence of formal Action Plan for time bound reforms - If ’Y’, status of implementation of the plan (Q) 5.0 4.0 Notable agreements in this regard are: § Memorandum of Agreement between the Ministry of Power (MoP) and Government of Karnataka (Dated: 12th February 2000) § Memorandum of Agreement between the Ministry of Power and Karnataka Power Transmission Corporation (Dated: 22nd May 2002) § KPTCL has signed the agreement under the APDRP Scheme and the following amounts have been released by the MoP: Rs. 81.50 crores (50% grant and 50% loan) on March 17th 2001 Rs. 29.77 crores (50% grant and 50% loan) on April 4th 2002. Operational: § One of the earliest signatories of the MOU with the GOI. § Three member KERC set up and is fully operational since November 1999 and two tariff orders have been passed. § The first tariff order increased tariffs by 17% and in the second tariff order increased tariffs by 16.2%. § Four regional distribution companies have been formed. § Consultants have been appointed to advise the Government on all matters relating to reform and restructuring program funded by the World Bank 4
A 2 - 3 year track record on subsidy payments 5.0 3.5 Financial: § Approval for clean balance sheets of 4 regional distribution companies under the BRP II (31st May 2002). A total of Rs. 3,722 crs was adjusted or written off by KPCL and GoK. § 10 yr FRP approved. Government to provide 8,999 crores in the next five years.. § The Ahluwalia Committee Report on the One Time Settlement of Dues has been accepted. MIS and Reforms: § The Energy Department comes out with a Status Report on Reforms every month, the only state to do so. § Has a Special Secretary Power Reforms besides Energy Secretary to monitor the reform process. > Average subsidy paid vs payable (%) Average Subsidy Paid vs Payable for last three years = 78%. It was over 100% in 2001-02 and between 60% - 70% in the previous two years. > Subsidy o/s (as % of subsidy payable in recent FY) A 3 - Health of State Government finances impacting ability to sustain subsidy levels A 4 - Legislation for power sector reforms 5.0 3.5 > Treatment of subsidies in the legislation including transitional support to utilities Subsidy Outstanding = 13.83% 5.0 1.5 § Year on year the subsidy payments has been increasing putting pressure on the GOK's fiscal position. The increase in agricultural tariffs is very modest. 1999-00: Rs. 769 crores, 2000-01: Rs. 1246 crores, 2001-02: Rs. 2300 crores $ The Karnataka Electricity Reform Act was passed on June 1st 1999. 5
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Rationale for Karnataka State Power Sector scoring - Ministry of Power

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