Vajpayee: political interference is getting in the way

A meeting of state chief ministers in March had promised to expedite reforms including the setting up of regulators and check the widespread theft of power.

"Despite 10 months having passed, 11 of our 28 states still have not taken the first step of setting up a regulatory commission," he said.

Only a minority have begun to split up the huge State Electricity Boards, which are plagued by bureaucratic indecision and often packed with political placeholders.

"Even where this has been done, the successor companies of SEBs in many states have not yet moved fast to implement the agreed reforms," he warned.

"In some states these companies are still not free from political and bureaucratic interference, defeating the purpose of the reforms."

Mr Vajpayee went out of his way to praise some states for setting up independent regulators, who have since reformed electricity rates.

Priorities

But the list of states he mentioned was slightly tarnished by the inclusion of both Orissa and Maharashtra.

Mirant's pullout from Orissa came as the company said it did not believe the guaranteed payments from the state-owned Power Trading Corp would actually materialise.

And the roots of Maharashtra's problems can be traced in part back to Mr Vajpayee's own party.

When they were in opposition in Maharashtra, the Bharatiya Janata Party (BJP) blocked the state's deal with Enron-controlled Dabhol Power Corp, before approving it once they had returned to office.

The deal was widely criticised as being made at far too high a price after the bare minimum of competitive bidding.