BHUBANESWAR: While the power distribution companies of the State are still struggling to cope with the high technical and commercial losses, the State Government’s attempt to reduce the loss to a sustainable level failed due to lack of desired cooperation from the utilities. The `2,400 crore capital expenditure (Capex) programme launched by the State Government with much fanfare in October 2010 to strengthen the distribution sector derailed midway mainly due to slow pace of project implementation and failure of distribution companies (discoms) to arrange counterpart funding.
Even after investment of `877.49 crore in the first phase, the State Government had to call off the Capex programme in May 2015 as the discoms expressed inability to arrange 50 per cent of the funds (`1,200 crore). As per the Capex programme, the discoms have been given the target to reduce the aggregated technical and commercial (AT&C) loss by 3 per cent per annum in their areas of operations. With five years time to complete the project from 2011-12 to 2015-16, the programme aimed at overall reduction of 15 per cent AT&C loss.
With a combined AT&C loss of 39.75 per cent during 2011-12 (while the actual loss was about 45 per cent), the discoms were able to reduce the loss to 34.17 per cent during 2016-17, said the latest report of the Comptroller and Auditor General (CAG) tabled in the Budget session of the Assembly. One per cent reduction in AT&C loss was expected to generate additional revenue of `50 crore per annum. “The AT&C losses were reduced only by 5.58 per cent during 2011 to 2017. The envisaged targeted reduction of 15 per cent could not be achieved.
This resulted in loss of opportunity to earn additional revenue of `471 crore which could have helped the discoms to further invest in system upgradation to improve efficiency,” the audit said. Implementation of Capex suffered due to inability of three Reliance Infrastructure subsidiaries - Nesco, Wesco and Southco - to provide the counterpart funding. Since the three discoms were piling up losses, they were not in a position to raise debt.
Besides, their assets were hypothecated to State-owned bulk power trading company Gridco, the nodal agency for implementation for the infrastructure programme. However, distribution licenses of the three companies were revoked in March 2015 by Odisha Electricity Regulatory Commission (OERC). The CAG rapped Gridco and monitoring committee headed by Energy Secretary for their failure to evolve mechanism for fixation of targets and achievements of milestones during implementation of the programme.