Outside agency to be roped in to audit KSEB’s R&M expenses

Finding the Kerala State Electricity Board’s (KSEB) rationale for rocketing annual repair and maintenance (R&M) expenses rather lame, the State Electricity Regulatory Commission (SERC) is going in for an independent audit to nudge out the truth.

The Commission has invited chartered accountants/consultancies for carrying out a ‘regulatory audit’ of the KSEB’s R&M spending for the 2010-2011 financial year. R&M expenses of all three wings of the KSEB - generation, transmission and distribution - will be covered in the audit.  The auditing agency will also suggest steps to streamline the accounting methods of the KSEB, the Commission said in its EoI for inviting the consultancy.  For 2010-2011, the KSEB had pegged Rs 231.85 crore as the ‘actual’ R&M expenses. This is Rs 70.37 crore in excess over the amount approved by the Commission for the fiscal and Rs 58.69 crore more than 2009-2010 expenses.

The commission frowning upon the KSEB’s R&M spending is nothing new. With the Commission, it has always been a sore topic.  ‘’The increase in R&M expenses has been erratic and it has been established by the reply given by the Board that there is no planning and control systems as stated by the Board to limit the controllable expenses,’’ the Commission had noted while truing up the KSEB’s accounts for the 2010-2011 fiscal.

The Regulatory Commission opted to rope in a consultant to study the R&M expenses after its own attempts to calculate the real expenses from past data failed.  The KSEB had drawn flak from the Commission recently after its overall annual expenses were found soaring uncontrollably. R&M expenses account for a large part of this.