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States must follow Delhi example: Ahluwalia

EM NEWS BUREAU ,  Wednesday, May 04, 2011, 16:45 Hrs  [IST]

Deputy Chairman of Planning Commission Montek Singh Ahluwalia opined that states must encourage Public Private Partnership (PPP) model in their power distribution utilities. At a recent conference in the capital by CII, Ahluwalia mentioned that PPP model in the distribution section has been very successful in Delhi making the distribution side of the chain financially healthy.

He pointed out that states governments are quite aggressively implementing PPP model for achieving infrastructure goals. In power sector, states are keen on implementing PPP model for generation projects; however, no other state government except Delhi has implemented this model in managing distribution systems.

Ahluwalia pointed out that it is imperative that the States strive towards improving the financial health of the distribution companies as that is the ultimate revenue generator for the entire power sector. He mentioned that the PPP model will specially benefit the states with large cities and improve the overall financial health of its utilities, giving an impetus to the overall power sector development.

Though the power sector has made considerable progress in adding generation capacities, there still lies a huge difference when compared to the progress in distribution side of the sector, which has relatively been quite slow. Though the government has endeavoured to strengthen the distribution business through measures under the APDRP scheme, there remain many distribution utilities that are still registering huge losses and are financially weak.
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