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‘Micro-privatising’ rural power distribution - mass produced community development in Orissa, India

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Title
‘Micro-privatising’ rural power distribution - mass produced community development in Orissa, India
Authors (non HEDON members)
Professor Malcolm Harper
Abstract
The electricity industry in Orissa State (population 35 million people) of India has been restructured and privatised. Generation, bulk, and regional distribution have been split into different businesses, Indian and multinational capital companies have taken over ownership, and the institutional stage would appear to be set for profitable growth and development.

But all this in itself makes little difference to what actually happens at the village level. Most of Orissa’s 39,000 villages are nominally ‘electrified’, but over a quarter of all the power that is supplied to them is stolen, and in some rural districts less than a fifth of that part of the power that is invoiced is ever paid for. Meters are absent, broken or unread, bills are wrong, undelivered or ignored, and field staff respond only to threats or to bribes. Transformers are burned out because transmission cables are shorted and the loads are unknown, and they remain un-repaired because they will only be blown again (Figure 1). Power may only be available for a few hours a day, or a week, and widely varying voltages frequently damage consumers’ appliances.

The tariffs for small domestic consumers, and for irrigation pumps, are in any case set well below the marginal cost of power to the distribution companies, but it is intended that the losses should be cross-subsidised from the profits on power supplied to industrial users. The companies can never make a profit on rural power, but in the present circumstances their losses are such that it would make more sense to withdraw altogether. This is not permitted by the Government Regulator, and it is said that the private owners of at least one of the four regional distribution companies in Orissa are considering cutting their losses and returning the whole business to the State. This would undo the whole restructuring process, which is being presented as a model for the rest of India. The power is not worth paying for, and therefore is not paid for; the vicious circle spirals downwards, and there appears to be no remedy.
Journal Section
General Article

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Issue
45
Pdf version
Download BP45-7-Harper.pdf
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Title in French
Micro privatisation de la distribution d’énergie en mileu rural'
Abstract in French
Cette initiative pourrait améliorer l’offre, actuellement défaillante, d’électricité a Orissa en Inde. Parmi les principales mesures, il convient de relever : une gestion plus efficace quand elle est prise en charge par une organisation intéressée aux résultats et ayant des responsabilités et des primes clairement définies. Les groupements communautaires ne devraient pas etre assujeties à des responsabilités complexes et différentes. Les intéressés devraient être motivés par la possibilité de réaliser des bénefices perçus selon des règles établies et si nécessaire les bénéfices pourraient être fractionnés.
Submitter
miriam@hedon.info

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Keywords
BoilingPoint45    Electrification    Rural    India   

Article body in English

Page name EN
Micro-privatisingRuralPowerDistribution-MassProducedCommunityDevelopmentInOrissaIndia


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