NEW DELHI: With the power distribution company BSES Rajdhani Power Limited requesting the Delhi Electricity Regulatory Commission in its Annual Revenue Requirement 2006-07 report that an amount of Rs.57 lakhs, not claimed as a separate item under the head "Legal Claims", be allowed for filing claims on account of the Uphaar cinema hall fire tragedy, a non-government organisation, Praja, has raised a serious objection stating that such claims should not be allowed to be passed on to consumers.

In its objections filed to the Annual Revenue Requirement (ARR) for 2006-07, Praja's Sudha Mahalingam has also raised serious doubts as to why the three power distribution companies have large amounts of incurred and planned capital expenditure for loss reduction, which is also disproportionately huge relative to the net capital base reported by the discoms themselves, when it is common knowledge that commercial losses can be reduced by toning up the management whereas reducing technical losses would require capital expenditure in toning up networks.

Stating that at the time of privatisation the technical losses of Delhi Vidyut Board were only 8.3 per cent and the commercial losses 45.3 per cent, Praja has questioned the logic behind incurring huge capital expenditure (capex) in the name of curtaining losses. The organisation has, therefore, urged the Delhi Electricity Regulatory Commission to scrutinise the nature of the capex reported by the discoms in their ARRs and ascertain the need for such investments.

It has also requested the Commission to direct the discoms to establish a credible correspondence between capex and Aggregate Technical and Commercial (ATC) loss reduction. While tighter scrutiny measures have been put in place by the Commission for capex items exceeding Rs.2 crores, the organisation has also sought a scrutiny of the actual execution of the projects.

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