Southern States - Kerala-Thiruvananthapuram   

Power tariff panel told to streamline KSEB

By Our Special Correspondent

THIRUVANANTHAPURAM Oct. 18. The Public Affairs Forum, an independent think-tank working in the capital, has urged the Kerala State Electricity Regulatory Commission to regulate the functioning of the Kerala State Electricity Board (KSEB) rather than confining itself to fixing the quantum of tariff to be levied from the people.

In its presentation before the commission, the forum pointed out that even a steep hike in tariff would not suffice to end the chronic fiscal ill-health of the KSEB if it was allowed to continue with its inefficient functioning and the Government allowed to continue with its non-fulfilment of its commitments to the board.

Making the presentation on behalf of the forum, former dean of IIM, Bangalore, M. N. V. Nair, pointed out that in its representation, the KSEB had not sought any hike in power tariff and had instead urged the commission to order the Government to pay the KSEB the subsidy it had committed to pay and to convert the balance of the deficit into a Regulatory Asset.

"We endorse the suggestion that the Government pay the outstanding amount due to the KSEB, but we cannot support the suggestion for the creation of the Regulatory Asset as that would be a mere accounting exercise that would shift the burden of the present to the future,'' Prof. Nair said.

Sharing the perceptions of the forum, the Centre for Development Studies (CDS) director, K. P. Kannan, G. Vijayaraghavan, management expert, and the Peninsular Polymers managing director, C. Balagopal, said a close study of the KSEB's performance would reveal that it was saddled with heavy expenditure commitments without commensurate avenues for income generation or appropriate managerial practices.

The KSEB itself had informed the commission that the gap between its expected revenue and projected expenditure would be Rs. 1,364 crores during fiscal 2003-'04. As against Rs. 253.17 crores likely to be spent on power generation, the board would be shelling out Rs. 2,015.30 crores for purchase of power, spending another Rs. 750.50 crores on employee cost and Rs. 741.69 crores on interest and finance charges.

Thus the aggregate revenue during 2003-'04 at the current tariff rate woudl be only Rs. 2,683.86 crores to meet a revenue requirement of Rs. 4,048.27 crores. The way out is certainly not another dose of tariff hike, but better management of resources and more fiscal discipline, they said.

The commission, they said, should function as a body monitoring the performance of the KSEB and that it would be a gross injustice if the cost of not having created such a mechanism being passed on to the consumers.

"We wish to reiterate that if the KSEB functions efficiently and if the Government fulfils its comitments, the current gap between the revenue requirements and expected revenue can be bridged and the required Rate of Return (RoR) ensured,'' they said.

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