Minimum Guarantee agreement: KSEB issues orders

THIRUVANANTHAPURAM: Kerala State Electricity Board (KSEB) has issued orders to continue the Minimum Guarantee agreements with industries which were executed before October 28, 2011.It was also decided that no Minimum Guarantee agreement shall henceforth be executed. The order said that it was observed that service connections were yet to be released in case of 370 applications registered under the former Minimum Guarantee scheme.  KSEB has been collecting 25 percent of the capital cost of the work as minimum return through the supply of energy.The order issued on October 28, 2011, had decided to collect the total amount for the connections from the industries. This was objected to by the small scale industries (SSI) and entrepreneurs who decided to start new units in the state.  Kerala Small Scale Industries Association (KSSIA) Ernakulam district president Shaji Sebastian said that the decision of the Board came after the directive from the Kerala State Electricity Regulatory Commission (KSERC).When KSSIA approached KSERC to continue the Minimum Guarantee agreements which was already executed, it was decided to issue a directive to the KSEB to honour the agreements already executed in the various field offices and to extend lines and release connections to such minimum guarantors without delay. Several SSI units planned to stop production following the earlier order to stop the Minimum Guarantee. It is not practical for the industrialists to pay the entire amount for the connection as only 25 percent of the energy is used by industries and the rest is used for other purposes and it was pointed out to the Commission, said Shaji Sebastian.KSEB has directed the SSIs to pay the amount in 60 instalments with 18 percent interest, which was not a practical solution. Now, the deputy chief engineers of electrical circles have been instructed to report the details of Minimum Guarantee agreements which were already executed but were not acted upon.