Chassard flayed the state government for dilly-dallying over power sector reforms and the precarious financial conditions of the MSEB. "The only alternative to correct the situation is privatisation of distribution," she told The Financial Express in an interview after meeting with the chief minister Vilasrao Deshmukh, deputy chief minister Chhagan Bhujbal, state and MSEB officials at the state guest house, "Sahyadri."

"It is ironical that the state which has many firsts to its credit, is lagging far behind in power sector reforms," Chassard opined. She blamed the state for not taking any concrete steps in this connection especially when various states have already swung into action.

Chassard flayed the state government overthe appointment of Power Finance Corporation as consultant to carry out power reforms. "It is like blind people trying to guide blind people," she remarked.

She said that it was disappointing that the Rs 5 crore loss has not been contained, adding that the money could have been utilised for the betterment of education, health or other social infrastructure in the state. She reiterated that the state will have to take up power sector reforms on a priority basis with a thrust on privatisation on power distribution.

On the state finances, Chassard said that the state has come out with a white paper detailing corrective measures, though it will have to chalk out a comprehensive and long term policy in this regard. "Such a long term policy will be aimed at implementing corrective measures during the next five to seven years," she noted.

Earlier, in a presentation the state finance department had pointed out that theere has been rise in salary related expenditure. In addition to this, there has been amounting interest burden due to borrowings for meeting growing revenue deficits.

The state finance department had also told the visiting WB co-ordinator that there has been drain on state's exchequer because of state public enterprises and market intervention operations, subsidies and user charges not reflecting cost of providing services.

The government sought WB assistance for fiscal and economic restructuring, room for manoeuvre and "fiscal space" and qualitative imrovements, innovation and adoption of best practices.

Chassard said that the WB board may take a final decision on funding of Rs 8,000 crore Mumbai Urban Transport Project-II in the middle of 2001. "Todays visit is a preparatory one as we have no authority to saction funds on the spot," she added. Chassard expressed displeasure over the government's failure to take concrete steps on people's participation in the rural water supply schemes and the implementation of "user pays" concept. The government's proposal of Rs 2,020 crore in thisregard has been pending with the World Bank since a long time.