One outcome is that Pune's electricity supply may be privatised, as a result of the acute power crunch in Maharashtra. Another result is that consumers in Pune could face higher power bills. The state has a peak hour shortage of 3000 MW and this is set to steadily worsen as the rabi season gets underway.

According to a senior state government official, while earlier the state government routinely starved agricultural consumers of power to ensure uninterrupted electricity supply to cities in Maharashtra, that government policy will now be reversed.

"Even the Union government concurs with the view that agriculturists, although a subsidised category, need to be given stable power supply as ours is an agrarian economy. The only option left to us is to starve urban circles to ensure that the rural areas are not adversely impacted by the a shortfall in power supply. "We feel that we may have to starve Pune. The city currently gets 500 MW of power despite its requirement of 750 MW from the Maharashtra State Eelectricity Board. This will help the MSEB to meet the increased demand generated by farm pump sets in the next few months. Private power utilities may be permitted to make up for this shortfall in power in Pune," the official said.

"No private power utility has immediately available additional power to replace MSEB's power in the Pune circle immediately, as would be required under a franchisee arrangement. Therefore, the privatisation route is the logical option," Tata Power Company executive director Pravin K Kukde said.

According to the state government official, a presentation of Maharashtra's power situation was made to Chief Minister Vilasrao Deshmukh at the first meeting after he took over.

At the meeting, the acute power situation in the state was discussed threadbare. A senior Maharashtra State Electricity Board functionary said at the meeting that while the current power shortfall was 3000 MW, the ensuing rabi season would witness more electric pumpsets being operated by farmers.

That would wreck havoc on the demand-supply situation. Without any additional generation capacity in the state, by 2009-2010 the shortfall would touch 7000 MW.

Kukde said: "The government's privatisation strategy appears to be aimed at replacing the historically cheaper power it has (through MSEB) that is supplied to urban region with reasonably priced power from the private sector. The cheaper power that is thereby freed can then become available to MSEB to supply to the farm sector."

Kukde said that this is based on the New Delhi model of privatising the power sector.

The state government may insist that any private power utility that is keen to suppy power to a city in place of MSEB should do so within three to four years. This would be distinct from the franchising arrangement between MSEB and Tata Power Company which TPC proposed in December 2003.

Tata Power Company has an advantage in the privatisation race because its 500 MW Khopoli plant, 50 km from Pune, can be tapped for supplying power to Pune. The power utility has also proposed a franchisee arrangement to replace MSEB's power supply to Nagpur and Nashik.