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7th January, 2004 (date of enforcement of amendment of Electricity Act).

Multiple licenses in distribution.

Regulatory Commissions – to develop market; fix tariff

The key reforms that were a turning point towards privatization were

Removed the need for license

Competition through international competitive bidding

Unbundling – Transmission viewed as a separate activity

The other policies and key reforms undertaken were

Unbundling of SEBs

Tax Benefits

National Tariff Policy of 2006

Allocation of captive coal blocks to private companies

Accelerated Power Development and Reform Program (APDRP) for distribution, permission for trading of power, etc.

The Ministry of Power had signed an MOU with the International Energy Agency in April, 1998 for cooperation in the power sector [6] . With some of these steps undertaken, the government has paved way for privatization and the power sector is set to grow at a rapid pace. We have seen success in the case of Orissa State Electricity to an extent as well as the Delhi Distribution Privatization.

ORISSA STATE ELECTRICITY BOARD PRIVATIZATION

INTRODUCTION

Orissa is the 9th largest state in India, and is the eleventh largest by population. The coast line and the natural reources of Orissa form its greatest strengths. At the same time, Orissa’s contribution to the GDP of India has been less than 2 percent. Infact, the rate of development in Orissa has been very less with GDP growth touching a maximum of 7%(YoY) in the early 1990s.

As a result, the state’s overall growth was crippled and being majorly an agricultural economy, it faced a major challenge in terms of development. The state remained poverty stricken and the government was looking at opportunities through which development could be achieved, to lift the state from its present problems.

NEW ECONOMIC REFORMS

In the year 1992, the government of India, opened up its markets for international trade and investment. State governments and government owned enterprises were encouraged to seek the support in terms of finances and technology to improve the sick state of their enterprises.

It was around this stage that several sectors saw a flurry of investments in various sectors. Governments became more open to the idea of sharing their monopoly, especially in sectors which their expertise was limited.

The government of Orissa during that period considered power reforms as one of the primary means of getting out of this trap. By inviting expertise into their power sector, they looked to this opportunity as a means of providing quality service and at the same time encourage development.

THE POWER SECTOR IN ORISSA

The power sector in Orissa was managed entirely government at all three stages, viz. production, distribution and the transmission. The Orissa State Electricity Board managed the entirety of the above operations. An absence of cost plus tariff led to low revenue and higher loan capital. OSEB’s tariff level was low and industrial sector’s share in total consumption declined from 69% in 1960/61 to 31% in 1996/97. There was high T&D loss in the form of technical and commercial losses (unauthorised connection,