The Hindu : Kerala News : KSEB is in better shape

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Monday, Sep 20, 2004

Kerala

Kerala

KSEB is in better shape

By P. Venugopal

THIRUVANANTHAPURAM, SEPT. 19. The power sector was one sector that had performed creditably under the three years of the Antony dispensation in the State in spite of the daunting challenge posed by two successive years of poor monsoon. This is the picture that emerges from a comparative analysis of the performance levels of the Kerala State Electricity Board (KSEB) during 2001 and now.

The credit for this achievement should go mainly to Kadavoor Sivadasan, who held the Electricity portfolio under the Antony Government. His focus had been on consolidating the financial position of the KSEB, rather than flashy gestures intended to elicit applause. As he hands over the reins of the Electricity portfolio to the new Minister, Aryadan Mohammed, the KSEB is in a much better shape than it was three years ago.

During the period of the previous LDF Government, the State made a big leap in power generation capacity with the commissioning of a string of power projects including the thermal plants at Kayamkulam, Kozhikode, Brahmapuram and Kochi. This improved the power availability in the State to a position where power cut and even load-shedding could be completely withdrawn. However, the thermal power plants also brought financial difficulties for the KSEB.

Thermal power

The proportion of high-cost thermal power in the total energy supplied by the KSEB to its consumers was 33 per cent in 1998-99, according to official data. It went up to 40 per cent in 1999-2000 and 51 per cent in 2000-01 to come down slightly to 47 per cent in 2001-02 and then go up once again to 61 per cent in 2002-03 and 68 per cent in 2003-04. The recourse to over 60 per cent thermal energy in 2002-03 and 2003-04 was particularly occasioned by the poor monsoons in those years.

The higher proportion of thermal energy supplied to the consumers put the KSEB's finances under severe stress. For the KSEB, the average cost of a unit of electricity, which was Rs. 1.71 in 1998-99, shot up to Rs. 3.76 in 2001-02, Rs. 4.01 in 2002-03 and Rs. 3.99 in 2003-04. Despite two tariff revisions, the average revenue realisation from a unit of electricity was Rs. 2.25 in 2001-02, Rs. 2.75 in 2002-03 and Rs. 2.96 in 2003-04.

Economy measures

During the last three years, the KSEB went in for a series of measures to bring down its expenses and improve revenue realisation to prevent its finances from going to shreds. The revenue gap, which was of the order of Rs. 1,316.4 crores in 2001-02, was systematically brought down to Rs. 1,015.5 crores in 2002-03 and Rs. 896.7 crores (provisional) in 2003-04. Several hard decisions to bring down the employee cost and establishment expenses were implemented, with the employees grudgingly taking the brunt of the initiatives.

Economy measures targeting the employees brought a saving of Rs. 88.55 crores between 2001-02 and 2002-03. Net annual savings from debt swapping done last year came to the level of Rs. 33.99 crores. Most importantly, the average loss in energy during transmission and distribution, which was 32 per cent in 2001-02, was progressively brought down to 27.50 per cent in 2003-04 and it is presently 26.07 per cent. This means the receipt of revenue from an additional 5.93 per cent electricity fed into the transmission and distribution system.

Revenue collection

The overall trend in the finances of the KSEB is sure to improve further during the course of this year due to two reasons. The first is that the south-west monsoon this time had been much better than those of the previous two years, making more low-cost hydel energy available for the KSEB to supply to its consumers. The official projection is that the proportion of high-cost thermal energy in the total power required by the consumers will come down to 51 per cent during 2004-05, compared with 68 per cent last year. The second reason is the improving trend in revenue collection each month.

The indications are that it will be now possible for the new Electricity Minister to even approach some of the issues troubling the KSEB employees with a relaxed frame of mind. For that he will have to thank Mr. Sivadasan.

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