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Power reforms get a boost

GOING AHEAD with further reforms in the energy sector, the State Cabinet on Tuesday decided to rename the UP Energy Trading Corporation as the UP Power Transmission Corporation to take care of power transmission in the State. It also decided to relax concessions given to the grain-based alcohol industry in the State and authorised Chief Minister Mulayam Singh Yadav to approve Governor TV Rajeswar?s address, which is to be delivered before a joint sitting of the State Legislature on May 11.

india Updated: May 03, 2006 00:50 IST

GOING AHEAD with further reforms in the energy sector, the State Cabinet on Tuesday decided to rename the UP Energy Trading Corporation as the UP Power Transmission Corporation to take care of power transmission in the State.

It also decided to relax concessions given to the grain-based alcohol industry in the State and authorised Chief Minister Mulayam Singh Yadav to approve Governor TV Rajeswar’s address, which is to be delivered before a joint sitting of the State Legislature on May 11.

The Cabinet also approved the first supplementary grants that the State Government proposes to bring in the forthcoming session of the legislature. This assumes significance as the supplementary grants are being presented within a month of the commencement of the first session of the current fiscal year 2006-2007.

A decision in this regard was taken at the Cabinet meeting that the chief minister presided over at his Lal Bahadur Shastri Bhawan annexe office here.

Chief secretary Naveen Chandra Bajpai told mediapersons the new corporation would be an independent body set up in accordance with provisions of the Central Electricity Act 2003.

With this renaming, the new corporation would be responsible for transmission of power, he said.

The Uttar Pradesh Power Corporation Limited (UPPCL) was divested of power transmission work and assigned the work of bulk trading (sale and purchase) of power, he said, adding that the new corporation would start functioning in the next two to three months.

A decision about the assets, the liabilities and the transfer of personnel to the new corporation would be taken soon, he said, adding various employees’ organisations were opposing the ongoing reforms.

The chief secretary said the Cabinet also approved the State Government’s guarantee to the Rs 786-crore loan that the UPPCL proposes to draw from the Power Finance Corporation and the Rural Electrification Corporation. The UPPCL had requested the State Government to guarantee a loan of Rs 905 crore for undertaking expansion programmes in the power sector, he said, adding the Cabinet had agreed to reduce the guarantee fee from 1 per cent to 0.25 per cent on the above loan.

The Cabinet also approved a proposal to extend the guarantee period on the loan drawn for transmission/distribution of power under the National Capital Region. As per the decision, the terms of the loan have been extended from 8 years to 10 years. Hence, the period of guarantee was extended to 10 years, he said.

As regards the concession given to the grain-based alcohol industry, Bajpai said the State Cabinet decided to amend the Government Order of 2006 that provided for concession in the Export Pass Fee to units that generated revenue of Rs 50 crore for the exchequer.

The concession would be granted to units in the first year of starting generation, he said, adding the units would, however, have to pledge a bank guarantee assuring revenue of Rs 50 crore to the State Government.

If the units failed to give revenue of Rs 50 crore, the remaining amount would be deducted from the bank guarantee, he said. This facility would be available for three years, he added.

First Published: May 03, 2006 00:50 IST