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SAC approves restructuring, unbundling of PDD

KT NEWS SERVICE. Dated: 9/6/2018 1:22:01 PM

SRINAGAR, Sep 5: The state administrative council (SAC), which met here today under the chairmanship of governor, Satya Pal Malik accorded approval for operationalization of the Jammu and Kashmir State Power Trading Company Limited (Tradeco) and issuance of SRO notification regarding PDD Transfer Scheme (Phase-I) Rules, 2018.
Advisors to Governor, B B Vyas, K Vijay Kumar & Khurshid Ahmad Ganai, Chief Secretary B V R Subrahmanyam and Principal Secretary to Governor, Umang Narula were present at the meeting.
It is pertinent to mention that the Central Electricity Act of 2003, applicable to whole of India (except J&K) mandated promotion of competition and efficiency in the power sector by operating it as a prudent commercial enterprise. One of the key steps towards this goal was “unbundling” of the generation, transmission and distribution undertakings in the States into separate corporate entities and running these on sound business lines.
The J&K Electricity Act, 2010 was enacted to provide a frame work similar to the Central Electricity Act of 2003. Consequently, J&K SPDC was approved as a Nodal Agency to act on behalf of the Government of J&K for the unbundling exercise to be completed in 2012 itself.
In 2012, Cabinet accorded sanction to the unbundling of the Power Development department into four successor companies i.e (i) Jammu & Kashmir State Power Transmission Company Limited (Transco), (ii) Jammu and Kashmir State Power Trading Company Limited (Tradeco), (iii) Jammu Power Distribution Company Limited (Jammu Discom), and (iv) Kashmir Power Distribution Company Limited (Kashmir Discom).
Even though the successor companies have already been incorporated, the operationalization of these companies could not take place till date due to various reasons.
The operationalization of Tradeco is proposed to be completed in two phases. The first phase is planned to be implemented immediately and would involve Tradeco carrying out functions/responsibilities related to power trading like purchase entire power requirement for JKPDD and perform activity of bulk supply of power, trading of surplus power, etc. The second phase will be initiated once other successor companies (Transco, Jammu Discom and Kashmir Discom) become operational.
For making the Tradeco functional, activities like winding up of the Commercial & Survey Wing of PDD, creation of office space for Tradeco, Staff transfer etc will be undertaken.
This initiative by the PDD is a first step towards unbundling of PDD and setting a roadmap for clearing the liabilities on account of outstanding power purchase bills. It will also reduce the cost of purchasing power by bringing in efficiency and taking advantage of discounts. The introduction of personnel with specialized skills in the power purchase sector will lead to optimization of the cost of supply of power and ensuring immediate financial and operational benefits to the Department.
The Administrative Secretary PDD will be the Chairman of Tradeco.