New Delhi: Through a new accelerated power development and reforms programme (APDRP), the finance ministry has sanctioned Rs50,000 crore for reigning in transmission and distribution losses in the power sector.

According to minister of state for power Jairam Ramesh, the APDRP scheme is awaiting cabinet approval, and will soon be sanctioned, albeit in a ''new avataar.''

The government had originally approved the APDRP scheme in March 2003, to accelerate distribution sector reforms. The idea was to reduce aggregate technical and commercial losses, and bring some semblance of commercial viability in the power sector. An added benefit would be reduced outages and interruptions, and higher consumer satisfaction.

Under the scheme, the government gives central assistance for beefing up the sub-transmission and distribution network, through the provision of half of the project cost, in the form of grants and loans. The state electricity boards and distribution utilities have to raise the other half from financial institutions such as Power Finance Corporation and Rural Electrification Corporation, or by themselves.

Sources say that at present levels, transmission and distribution losses amount to almost a third of the total power that flows over the network. The earlier APDRP scheme had large sanctions, but had a problem of low actual disbursement, which did not allow the states to fulfill the necessary requirements to lift funds.

Power utilities are disbursed additional funds once the first disbursement has been used up. That means a utility will have to first use up a quarter of the project cost that it got from government funding and financial institutions to get the next half of the project funds. The remaining 25 per cent of the project cost is provided once the available funds have been utilized completely.

According to the power ministry's website, the programme, along with other initiatives of the government of India and of the states, has led to reduction in the overall aggregate technical and commercial losses from 38.86 per cent in 2001-02, to 34.54 per cent in 2005-06. In rupee terms, the losses shrank during this period from Rs29,331 crore to Rs19,546 crore. In terms of percentage of turnover, the website says losses came down from 33 per cent in 2000-01, to 16.60 per cent in 2005-06.