GUWAHATI, June 26 – The Asian Development Bank (ADB) has threatened to drop the promised loan to the Assam Government for power sector reforms because of the failure of the government to comply with the reform conditions. In a letter to the Department of Expenditure of the Finance Ministry, a copy of which was also forwarded to the Chief Secretary, Assam, the director of the ADB Sharmila Chavaly said that the Bank processed a loan for the power sector in Assam last year and about 250-million dollar loan was in the pipeline for the current calendar year.
But an internal review to ascertain the State’s readiness to avail the loan and discussions with the officials of the Department of Expenditure, the ADB came to the conclusion that the State failed to comply with the reform conditions mandated in the power sector. It appears that the State has slipped up in the process and outcome with reference to the Memorandum of Understanding (MOU) signed with the Department of Expenditure, the letter added. The letter further said that the failure of the State Government raised doubts on whether it has the resolve to implement the same.
The ADB director requested the Department of Expenditure to convene a meeting with the Government of Assam at the highest level to access the readiness of the government for this year’s loan. The ADB also sought the advice of the Department of Expenditure on whether the loan should be dropped after an assessment of the readiness of the State Government to accept the same is made.
It may be mentioned here that the proposed ADB loan gave a ray of hope to the otherwise dismal power scenario in the State but so far the State Government has not been able to carry forward the reform process in the sector and though the Bill for reforming the sector was passed last year, the Assam State Electricity Board authorities could finalise the amount that would be required for the terminal benefits of the employees only last month, which delayed the entire process. The employees of the Board are also not convinced about their future following the restructuring of the ASEB and they have already launched an agitation opposing such a move. Under the circumstances, it would be difficult for the Assam Government to carry forward the reform process to avail the ADB loan this year.