Srinagar, Aug 30: In a significant move aimed at privatization of the power distribution in Jammu and Kashmir, the state cabinet Thursday approved setting up of Transmission and Distribution companies in the Power Development Department (PDD).
The cabinet which met here under the chairmanship of the Chief Minister Omar Abdullah accorded sanction to the setting up of one State Transmission Company (Transco) and two Distribution Companies (Discoms) - one each for Kashmir and Jammu regions, and one Tradeco (holding company) under companies Act 1956.
“It is a step towards unbundling the power distribution and transmission system,” said a senior PDD official. “It would ultimately lead towards privatization of the power sector,” he said.
However, Principal Secretary Power Sudhanshu Pandey said the move is aimed at “professionalizing” the power distribution sector. “The power distribution in other states is being taken care of by the companies set up under the companies act and we are moving towards the same direction,” he said.
The State Transmission Company would replace the System and Operation Wings of PDD, both in the Kashmir and Jammu divisions, the official said.
Setting up of these companies would bring in “more accountability” in the PDD and help the authorities to raise funds for development of the sector.
The State Transmission Company would be headed by engineer-in-chief at the state level and the company would have a chief engineer each in Kashmir and Jammu divisions.
The two Distribution Companies would be headed by a Chief Engineer each in both the regions. The companies would function under the overall control of Development Commissioner Power.
The Tradeco would be a trading company dealing in selling of the power generated in the state sector and purchase of the energy from outside to meet the local requirements.
“The companies will require raising their own assets for sustenance,” the official said. “To begin with all the companies will be government-owned. They would be governed by the companies’ laws and they would be governed by company laws,” an official said.
The state government had started the process of unbundling of the PDD with the setting up of the State Power Development Corporation (SPDC). It had hired the services of the PriceWaterHouseCoopers for giving the blueprint for setting up of the Transmission and Distribution companies in the state.
Pertinently, the state government has already set up the State Road Development Corporation (SRDC), a move aimed at privatization of road communication sector in the state.

Lastupdate on : Thu, 30 Aug 2012 21:30:00 Makkah time
Lastupdate on : Thu, 30 Aug 2012 18:30:00 GMT
Lastupdate on : Fri, 31 Aug 2012 00:00:00 IST