The Hindu Business Line : NTPC's distribution arm to assume control of Mescom

The transfer would have to be ratified by the State Cabinet, the State Government officials said. Mangalore would comprise the first circle for the power major's foray into electricity distribution.

The Karnataka State Government's policy allows transfer of equity control of up to 51 per cent to other investors, including domestic and foreign private sector. However, few private sector investors have evinced interest in the proposal. This prompted the State Government to approach NESCL. In addition to Mescom, the State Government had also asked NESCL to take over the Chikmagalur and Shimoga circles in the State. But NESCL has sought delinking of Mangalore from both Shimoga and Chikmagalur circles.

The sources said that the State Government prepared to compensate some of the subsidies to the distribution company. These subsidies included losses incurred under supplies to Bhagya Jothi and Kutir Jothi Schemes (electricity supply to scheduled castes). But commercial losses would not be compensated by the State Government.

Currently, figures for Mangalore, submitted to the State Electricity Regulatory Commission indicated that the gross electricity sales in the region was around 5,700 million units per annum. At least 50 per cent of the supply was un-metered. This included at least 3.25 lakh irrigation pump sets with a specific consumption of about 4,993 units per pump set.

The distribution loss, according to the data, was 22.25 per cent inclusive of EHT (extra high tension) load. Exclusive of the EHT consumption, the loss ratio according to the data was 25.25 per cent. This is also the loss ratio applied for fixing tariffs. The sources said the State Government hoped to cut these losses through NESCL's participation in Mangalore.

The State Government also expected NESCL participation to provide models for improving revenues through better billing and collection efficiencies. Currently, collection efficiency was barely 50 per cent. Improvement in both billing and collection was expected to progressively bring down the subsidy burden. In addition, the State Government also hoped to show case Mescom as a model for privatisation of the remaining four circles in the State.

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