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Anil Sasi

New Delhi , Aug. 28

THE private sector may be setting efficiency benchmarks in most sectors. In power distribution, however, the public sector is clearly showing the way forward.

State-owned utilities of Andhra Pradesh, Rajasthan, Himachal Pradesh and Karnataka have outperformed by a wide margin compared to private distribution companies operating in Delhi and Orissa in terms of reducing aggregate commercial and technical (AT&C) losses during the last two years, according to data compiled by Power Finance Corporation and State Electricity Regulatory Commissions.

High AT&C losses, which have been the main reason for near bankruptcy of distribution utilities in most States, is a measure of the units available for sale by a utility and the units realised by it.

Leading the public sector brigade is Jaipur Vidyut Vitran Nigam Ltd (JVVNL), one of the companies formed after unbundling of the erstwhile Rajasthan Electricity Board, which has brought down AT&C losses by nearly 21 percentage points between 2001-02 and 2003-04.

During the same period, the Himachal Pradesh State Electricity Board brought down AT&C by 20.10 percentage points and the progress made by the utility is significant with loss levels plummeting to below 9 per cent and, more importantly, this reduction happening on a comparatively lower base.

Andhra Pradesh Northern Power Distribution Co Ltd (APNPDCL), one of the four state-owned utilities in Andhra Pradesh, has brought down losses by nearly 16 percentage points during the two-year period.

The performance of private companies pales in comparison. Reliance Energy-controlled NESCO in Orissa is among the better performing private distribution utilities, having managed a loss reduction of 10.12 percentage points during the period.

The performance of three private distribution utilities in Delhi, in terms of bringing down losses, has been around just 3 percentage points.

This despite Delhi being a compact distribution zone with a primarily urban consumer profile and an efficiency loss reduction criterion being built into the privatisation pact.

The data excludes the private companies operating in Mumbai.

Also, the better performing state-owned utilities are the ones that have followed unbundling and corporatisation, with the unbundled utilities of Rajasthan, Andhra Pradesh and Karnataka doing much better in tackling losses than SEBs. The Himachal Pradesh SEB is a notable exception.

The worst performers, however, also figure in the state-sector, with utilities in Bihar and Uttar Pradesh showing no signs of tackling losses.

According to Government officials, distribution utilities achieve break-even at AT&C loss levels of 25 per cent or so and any dip in losses below the 25-per cent mark would enable them to move towards operational profits.

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