AES has the controlling stake in Cesco, the joint sector outfit in charge of power distribution in eight districts in Orissa.

The CEO of AES, Danis Bakke, is reported to have said recently that Cesco would be forced to increase tariffs if the government does not compensate the power sector for the losses caused by the super cylone that hit the state on October 29.

Political parties and consumer forums have strongly criticised the company saying "Cesco is trying to take advantage of its monopoly in the market." AES recently acquired controlling stake in Cesco which distributes power to about 600,000 consumers in Cuttack, Kendrapara, Jagatsinghpur, Jajpur, Dhenkanal, Khurda, Puri and Nayagarh. Cesco has been the worst sufferer of the October 29 cyclone whichdestroyed large areas of coastal Orissa.

Bakke, who was here on November 10, told reporters that Cesco has incurred a loss of around $ 60 million. Stating that AES Corp would provide an assistance of $1 million for restoration of power supply in the cyclone- affected districts, Bakke reportedly said the company will be forced to approach the Orissa Electricity Regulatory Commission for tariff revision if the government declined to compensate the loss.

"People have to bear the cost if the government does not share the burden," he reportedly cautioned.

Union defence minister George Fernandes, who is also the chief of the central task force for relief for the state, reacted sharply to the statement. At a meeting with Orissa chief minister Giridhar Gamang, he reportedly said the AES CEO should not have made such remarks at this juncture.

Power consumers are furious over Bakke's remarks, and say that the company had not insured its assets. The Orissa Grahak Mahasangha, the co-ordinating body of consumerorganisations, has threatened to take to the streets if Cesco passed on the cyclone loss to consumers. "Cesco can't penalise the consumers for its own fault," said Mahasangha president Kulamani Acharya, pointing out that the distribution company had not covered the assets under insurance. However, state energy minister is strongly arguing in favour of Cesco. "I have told the PM that unless the distribution company is compensated, power tariff would be increased," hesaid.