However, the state government on Thursday made it clear that it will take necessary steps in this direction only after "taking the MSEB's 1,20,000 strong staff into confidence."

The state government's move to privatise power distribution "in phases" deserves importance, especially since the World Bank declined to entertain any proposal for financial assistance. The state government is keen on WB aid of Rs 15,000 crore to carry out various pending water supply schemes while Rs 1,800 crore will be needed for rural water schemes, Rs 6,000 crore for Mumbai Urban Transport Project-II and Rs 6,000 crore for the second phase of forest development programme.

WB has already expressed serious concern over inordinate delays in the implementation of power sector reforms in Maharashtra, especially when several states have already marched ahead in this direction quite a long time ago. It had pulled up the state government and MSEB for the daily loss of Rs 5 crore incurred by the latter and had insisted for "expeditious reforms in the power sector."

State chief minister Vilasrao Deshmukh who met the WB regional vice president (south Asia) Nishmizu Meiko admitted that there was no alternative but to resort to privatisation of distribution. However, "it will be possible only after talking to the MSEB staff," he reiterated.

Deshmukh said that the state had already privatised power generation and added that the first phase of the Dabhol Power project has been commissioned. The power projects by Reliance and Ispat Group have already been cleared.

Deshmukh, who returned after a two-week trip to the US and the UK told reporters that while the WB appreciated the state government's efforts on fiscal management, the entire issue of providing financial aid revolved around the speedy implementation of power sector reforms. "The World Bank is looking at the state government's various efforts on fiscal correction in totality and not isolated," he added.

It must be mentioned here that various trade unions at the MSEB have opposed the privatisation of power distribution and have threatened to go on strike. The government has been repeatedly telling them to not to worry as the final decision will be taken only after detailed discussion with them.

These unions have said that privatisation is not the way out, but have stressed the need for controlling political interference in the day-to-day functioning of the MSEB. They have also called for improvement in the administration.