The Hindu : Discoms report heavy losses

Online edition of India's National Newspaper
Tuesday, Jan 20, 2004

New Delhi

New Delhi

Discoms report heavy losses

Lalit K. Jha

NEW DELHI, JAN. 19. Some 18 months after the much-acclaimed power sector reforms, in the Capital, the professionally run discoms and the bureaucrats-administered Transco have reported a massive financial loss of Rs. 4,527 crores. Unless the Delhi Government pumps in at least a few thousand crores as subsidy to offset this unprecedented revenue gap, the power sector experts claim that this might result in a massive tariff hike in the Capital - Rs. 3.05 per unit cutting across all sections of consumers on an average -- from the next financial year.

In their mandatory annual revenue requirement (ARR) submitted to the Delhi Electricity Regulatory Commission (DERC), the Delhi Transco and three discoms - BSES Yamuna Power, BSES Rajdhani Power and North Delhi Power Limited (NDPL) - have shown a combined revenue gap of a whopping Rs. 4,527 crores for the year 2004-2005.

Based on the ARR and subsequent public response and public hearing, the DERC would determine the power tariff for the next financial year, which as per the existing Act normally should come before April 1.

Power sector experts said that with the existing subsidy given by the Delhi Government for domestic consumers ending on March 31, a substantial rise in tariff was `now' inevitable.

In their ARR, the Delhi Transco has projected a revenue gap of Rs. 2,945 crores that is shared between NDPL (Rs. 686 crores), BSES Rajdhani (Rs. 560 crores) and the BSES Yamuna (Rs. 336 crores).

With the Delhi Government having already promised a financial grant Rs. 693 crores to the Delhi Transco as part of its power sector reforms, the net revenue gap comes down to Rs. 3,814 crores, which has to be recovered from 1,254 crore power units only even as the discoms would be distributing 2,163 crore units. "This is because of heavy aggregate technical and commercial (AT&C) loss,'' officials said. While the BSES Yamuna Power has projected an AT&C loss of 50.7 per cent, the BSES Rajdhani Power has projected an AT&C loss of 42.7 per cent and NDPL 40.85 per cent.

Following the publication of ARR last week by the DERC, senior officials of Department of Power in the Delhi Government conceded that the huge revenue gap projected by these companies have put a big question mark on the much acclaimed power sector reforms in the Capital.

"All the projections and promises have proved wrong so far. Earlier, the projected annual increase in electricity tariff by SBI Caps was just 10 per cent. Now it seems the hike would be much steeper and pinch the poor domestic consumers unless we pump in massive subsidy. There seems to be no way out,'' argued a senior official.

The massive projected loss has given an opportunity to opponents of the power sector reforms in the Capital to raise their voice once again. "It is an open loot by the corporate sector and that too with active support of top Government officials,'' alleged Rajan Gupta of the Bharatiya Mazdoor Sangh (BMS). "At this rate the Delhi Government would have to give a subsidy of more than Rs. 15,000 crores in the first five years to prevent any hike in place of Rs. 3,450 crores promised earlier,'' he claimed.

Mr. Gupta alleged that the SBI Caps and the Delhi Power Secretary were responsible for the present mess, as they have misled the Government and the people.

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