Financial Daily from THE HINDU group of publications
Monday, Jul 21, 2003
Industry & Economy
Centre lauds power reforms process in TN, AP
Chennai , July 20
THE Union Power Ministry is satisfied with the implementation of the Accelerated Power Development and Reforms Programme (APDRP) in the southern region. Among the southern regional State electricity boards or utilities, Tamil Nadu and Andhra Pradesh have done much better than the other two States, according to Mr R.V. Shahi, Union Power Secretary.
He was talking to mediapersons here on Saturday after reviewing the performance of the States in the southern region under the APDRP and their business plans. Mr Shahi said a similar review had been completed for the western region while those for the eastern and northern regions would be completed by July end or early August, after which a national-level meeting would be convened.
The meeting today reviewed three issues implementation of the APDRP, reform initiatives, and turnaround business plans of the utilities. All States had been asked last year to draw up their five-year programme of improvements. The allocation under the APDRP would depend on the States' performance for both components of the programme incentives and investment.
He pointed out that with the focus on power distribution, issues such as reliability index of power supply, technical loss reduction, proper billing, proper metering, improvement in bill collection, and theft reduction had come into focus. Unless there was a turnaround of the utilities, developers and investors were reluctant to invest in the sector.
The Secretary said Tamil Nadu had introduced the concept of reliability index for power supply in six cities and towns Chennai, Coimbatore, Tiruchi, Madurai, Salem and Tirunelveli.
Under the APDRP, Tamil Nadu had got an allocation of Rs 976 crore and the State had assured him that it would be in a position to use Rs 600 crore this year and the balance by June 2004. By end of this August, the Tamil Nadu Electricity Board had said it would have a call centre in place in Chennai.
Mr Shahi said the TNEB's collection efficiency at 99 per cent and distribution loss at 18 per cent were the best in the country. The average distribution loss in the country was 40-50 per cent.
On its business plan, he said the TNEB had said it would reduce its loss by about Rs 200 crore this year, by Rs 100 crore each next year and the year after, and by Rs 200 crore in 2006-07, by which time it was expected to turn around.
With regard to Andhra Pradesh, Mr Shahi said that last year the distribution companies were not able to meet their working capital requirements, whereas they were now able to fully pay for the maintenance and other establishment charges, as well as paying for the power purchased. The Government subsidy during 2002-03 reduced from Rs 3,000 crore to about Rs 1,800 crore. As per the State's business plan, by 2006-07, the distribution companies would not need government support at all and would be on their own.
Andhra Pradesh had started computing power supply reliability index for 20 towns and had also put in place an effective anti-theft legislation. In the last three years, about 3,000 persons had been arrested for power theft and one lakh cases examined and consumption of power assessed and a sum of Rs 1,400 crore collected through such drives. The State had set up call centres in all district headquarters and this year planned to set them in the rural areas, he said.
Mr Shahi said Andhra Pradesh had a sanctioned amount of Rs 1,460 crore under the APDRP and this year the State expected to use up to Rs 650 crore with the balance in 2004-05.
The Secretary said that Kerala had set up its regulatory commission and the first tariff petition was expected to be filed this month. The State had issued an anti-theft ordinance. Kerala had started with profit centres for generation, transmission, and distribution, and in a year proposed to reorganise them.
Though the State had 100 per cent metering, it needed to replace eight lakh defective meters out of the total 46 lakh consumers. The system loss was estimated at 30 per cent and collection efficiency at 90 per cent.
In 2002-03, the electricity board's loss was Rs 1,023 crore and according to the business plan, this would be gradually reduced by over Rs 500 crore in the next three years. Under the APDRP, the State had got Rs 350 crore, of which it would use Rs 190 crore this year and the balance next year. The electricity board had introduced the reliability index in Thiruvananthapuram and would extend it to Kochi and Kozhikode.
As far as Karnataka was concerned, the utility faced the problem of heavy shortfall in hydro generation because of which it had to purchase high cost power. This resulted in the financial performance deteriorating during 2002-03, Mr Shahi said and added that the utility planned to make up for the losses. The utility had also gone to the electricity regulatory commission with a multi-year tariff proposal.
Under the APDRP, he said that of the Rs 1,200 crore sanctioned to it, Karnataka would use up Rs 600 crore this year and the balance next year.
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