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State goes back on promise of uniform power tariff for city

Energy minister says move will cost `2,000 crore, can’t give preferential treatment to city.

mumbai Updated: Mar 23, 2012 01:48 IST
HT Correspondent
HT Correspondent
Hindustan Times

Power consumers in suburbs will continue to pay more than their south Mumbai counterparts as the state government has reneged on its promise to introduce uniform power tariff for the city, terming the move economically unviable.

Energy minister Ajit Pawar on Thursday said in his reply on the supplementary budget discussion: “We [the Cabinet] took a decision on March 12 that uniform power tariff is not feasible in Mumbai. Such a move will lead to a burden on the exchequer to the tune of Rs 2,000 crore. We cannot give preferential treatment to the city," said Pawar.

The decision has been in the offing since 2010 with citizens and public representatives making a strong demand for uniform rates like in Delhi. In the run up to the recently concluded civic polls too, the ruling combine parties — the Congress and NCP — had harped on this promise.

Ajit Pawar said the final decision was taken after studying the report that was submitted by consultancy firm PricewaterhouseCoopers, which was commissioned by the Maharashtra Electricity Regulatory Commission (MERC) to analyse the issue. The report, submitted last year, concluded that uniform tariff is possible only if the state offers cross-subsidy to the power companies, the energy minister said.

Mumbai’s 39 lakh consumers get power from four companies — state-owned BEST and Mahavitaran, and private firms Tata Power and Reliance Infrastructure — each charging different rates. Among the private companies, Tata Power, which supplies mainly to the island city, sells power at Rs3.95 per unit to domestic consumers, while Reliance Infrastructure supplies power to suburban domestic consumers at Rs 5.24 a unit.

Pawar said the government promise that will be kept is making the state load-shedding free by the end of this year. “I maintain and reiterate my promise that the state will be load-shedding free by end of 2012,’’ he said.

However, Pawar’s statement runs parallel to the one made by chief minister Prithviraj Chavan recently, as well as experts’ estimates. Chavan had told HT in February that it will be difficult to meet the target due to lack of fuel supply. Experts have said coal shortage, as well as the delays in commissioning projects will make it near-impossible to rid Maharashtra of power outages.

First Published: Mar 23, 2012 01:46 IST