BHUBANESWAR: The decision of the State government to invest around Rs 1,800 crore in Tata Power managed distribution companies has raised eyebrows.
Many have questioned the need for the government to provide capital grant for asset creation for a private entity even after privatisation of the power distribution business. The basic stated objective of privatisation is to make power supply more efficient, meet the needs of a growing economy and develop an economically viable power industry to ensure Odisha attracts private capital while safeguarding the interests of the consumers.
The proposed investment of the State government is going to be made at a time when Tata Power has already submitted its business plans to the Odisha Electricity Regulatory Commission (OERC) indicating its investment proposals for five years.
“Basing on the load flow analysis carried out by the discoms, the State transmission utility OPTCL has come up with a proposal for installation of 99 33/11 KV primary sub-stations and 64 independent 33 KV lines of 812.05 km length with a total estimated cost of Rs 1,796.73 crore,” said a note of the State Cabinet that approved the proposal.
Earlier, the State government had invested Rs 3,843 crore on the construction of 473 grid substations of 33/11 KV capacity under the Odisha Distribution System Strengthening Project (ODSSP). The status of these sub-stations and the benefit accrued to the consumers are not known as the ODSSP accounts are yet to be audited, sources in the power sector said.
The audited balance sheets of the four distribution companies (discoms) before sale to Tata Power Company Ltd (TPCL) as on March 31, 2020, show the value of total assets created out of government grant is only Rs 922.20 crore despite an investment of Rs 15,096 crore by the State government in infrastructure development of the discoms from 2009 to 2021.
As the value of assets added in the infrastructure of discoms during this period was neither capitalised nor shown in the balance sheet, this resulted in purchase consideration for sale of four utilities to Tata Power at an abysmally low price. TPCL paid only Rs 752.25 crore for buying 51 per cent equity stakes of the four discoms.
“The State government holding the ownership of the capital grant assets of discoms is ridiculous because it allowed opportunity to keep the assets outside the purview of audit and capitalisation. This provides great opportunity to corrupt officials to loot public money,” said former Finance Minister Panchanan Kanungo.
Power analyst Ananda Mohapatra said, “The matter which surprises me the most is the impropriety of OERC in ignoring the zero value of government grant assets shown by the erstwhile WESCO in the balance sheet prepared for its sale to Tata Power.”