State govt junks outsourcing idea

SHILLONG, June 9: Buckling under pressure from various quarters, the state government has decided to provide 100% budgetary support to Meghalaya Energy Corporation Limited (MeECL) to repay the Rs 1,345 crore Atmanirbhar loan.
The decision of the state Cabinet, announced by Chief Minister Conrad Sangma, effectively terminates the proposal to outsource MeECL’s two distribution circles to REC Power Distribution Company Limited.
The support, however, will come with riders. Sangma said the government will set certain targets for MeECL to be achieved in a time-bound manner. Secondly, MeECL has to pledge some kind of security in terms of mortgage of assets to the government.
“We have asked the Finance and Power departments to work out details of the targets which the Power department and MeECL have to achieve. Based on that, we will move forward,” the CM said.
He also said that the government will convey its decision on the budgetary support to Rural Electrification Corporation and Power Finance Corporation.
Sangma cautioned that the decision will not solve all the problems, afflicting the Power department and MeECL as issues, such as payment of terminal benefits worth Rs 800 crore, Aggregate Technical and Commercial losses and reforms in tariff, were yet to be addressed.
Admitting that it will be a challenge for the government to support MeECL, he said the government took the decision after getting a commitment of full support from the Power Minister and MeECL employees for a turnaround.
“We feel it is fair to give a chance to MeECL to bring in the much-needed reforms,” the CM said.
Following the decision, the state government will now need to keep a budgetary provision of around Rs 150-200 crore annually.
Asked if this burden will be passed on to the consumers, the CM categorically stated the Power Regulatory Commission, which finalised a new tariff recently, made it clear that Atmanirbhar loan availed by MeECL cannot be incorporated in the cost factor of tariff.
The government’s decision comes in the wake of growing opposition from MLAs of ruling coalition and opposition Congress besides the Power department against the move to outsource the distribution circles of MeECL.
UDP hails decision
The United Democratic Party (UDP) welcomed the decision of the government, maintaining that it would boost the morale of the MeECL employees and open up opportunities for formulation of proper policies, strategies and measures to streamline the functioning of the power sector.
Hailing the state government for giving due consideration to the views and concerns of political parties, NGOs and individuals, UDP general secretary Jemino Mawthoh said, “I would like to express my appreciation on behalf of my party to all the leaders of different political parties and NGOs who made efforts to oppose the earlier decision.”
Terminal benefits: Matter referred to Advocate General
With the Coordination Committee of Registered MeECL (Employees) Associations and Unions (CCORMAU) threatening to file an FIR if the government does not take steps to release the terminal benefits of the retired employees, Power Minister James Sangma on Wednesday said that the government has referred the matter to the Advocate General.
Sangma said that the department was concerned over the matter but MeECL was unable to clear the terminal benefits of retired employees since the Meghalaya State Electricity Regulatory Commission had disallowed clearance of terminal benefits.
The Power department is also in discussion with the Finance department on the matter, Sangma said while expressing optimism that the matter would be resolved at the earliest.