A committee appointed by the Maharashtra government Wednesday recommended that the state's electricity board be privatized so that it could effectively recover outstanding dues from consumers.

Submitting the second part of its report to the government, the committee headed by former bureaucrat Madhav Godbole said the Maharashtra State Electricity Board (MSEB) should be split into three companies to handle power generation, transmission and distribution respectively.

The committee also recommended that the MSEB restructure its tariff policies to recover dues from all users, state government sources said.

The Godbole committee submitted the first part of its report earlier this year. That dealt with the MSEB's disputed power purchase agreement with U.S. energy major Enron.

The state government is understood to have already decided to split the MSEB. As a first step to privatization, it is considering a proposal to increase tariffs by 30 percent for all domestic and commercial consumers. The MSEB is also working out plan to recover its distribution losses by enhancing vigilance. Currently 36 percent of the power distributed by the MSEB is lost due to transmission losses.

The World Bank has put pressure on the Maharashtra government to clean up its act in order to get assistance to the tune of Rs.83 billion. The funds will help the MSEB to create three separate companies to handle power generation, transmission and distribution respectively.

The bank has also urged the state government to increase the MSEB's financial viability. In the last financial year (2000-2001), the MSEB received indirect subsidies amounting to Rs.40.5 billion, according to finance ministry sources.