Glaring holes in ‘powerful’ Haryana

rajeev ranjan roy

Chandigarh

The tall claims of Chief Minister Bhupinder Singh Hooda on making a ‘powerful’ Haryana stand exposed in the wake of ‘glaring holes’ stumbled upon by the Comptroller and Auditor General of India (CAG) with regard to the functioning of Uttar Haryana Bijli Vitran Nigam Limited (UHBVNL) and Dakshin Haryana Bijli Vitran Nigam Limited (DHBVNL). The two key power distribution companies or discoms have been accused of not being ‘able to recover their cost of operations during 2006-07 to 2010-11 and the revenue gap, after considering subsidies and other income, increased from Rs 403.32 crore in 2006-07 to Rs 1,663.23 crore in 2009-10.’ The revenue gap is still in higher zone, which is estimated to be over Rs 400 crore. The number of consumers increased from 41.46 lakh in 2006-07 to 47.88 lakh in 2010-11 and connected load also went up from 11,771 mega watt (MW) during this period, while the capacity of distribution transformers increased from 10,899 mega volt ampere (MVA) to 16,786 MVA.

However, as compared to connected load, there was still a shortfall of 4,699 MVA in the capacity at the end of 2010-11. As per the assessment done by CAG, the damage rate of distribution transformers was higher than the norms prescribed by Haryana Electricity Regulatory Commission (HERC). There were delays in the repair of transformers by firms. Due to the non-installation of targeted addition of capacitor banks, the discoms could not achieve the energy saving of Rs 103.31 crore. “UHBVNL incurred extra expenditure of Rs 539.81 crore on 89,969 tube well connections, and DHBVNL incurred extra expenditure of Rs 204 crore,” said the CAG in the report. The amount recoverable from consumers in case of UHBVNL and DHBVNL increased from Rs 1,482.75 crore to Rs 2,377.97 crore and Rs 1,388.07 crore to Rs 2,250.57 crore respectively during 2006-07 to 2010-2011.

The financial health of the two firms deteriorated from 2006-07 to 2010-11 as the accumulated losses surged from Rs 1,774.31 crore to Rs 6,127.04 crore due to heavy burden of interest on borrowings, high aggregate technical and commercial (T&C) losses and increase in the employee cost. It is worth noting that Haryana government provides subsidy with a view to ensuring supply of power to agricultural pump set consumers at the concessional rate of tariff. The subsidy support to UHBVNL shot up from 50.24 per cent to 68.97 per cent of revenue during 2006-08. Though the subsidy amount keep fluctuating from higher to lower side and vice versa, there is no provision for cross-subsidisation. What ails discoms?

According to CAG, there is no system to analyse deviations from plans and suggest remedial measures, while there is no provision to analyse and look into the load growth and adequacy of distribution network. The cases of misappropriation and embezzlement of revenue and theft of material are not reported to the competent authorities, and so was the case in dealing with the issues arising out of defective meters. Huge expenditure on high voltage direct supply (HVDS) is being incurred, without taking into account techno economic considerations, which put undue financial burden on discoms and consumers. What is the way out? “Planning capacity addition and loss reduction schemes properly, keeping in view load growth, improving contract management so that the projects are completed timely, adhering to standards of performance prescribed by HERC to improve customer satisfaction, and implement the scheme for energy conservation and energy audit after proper planning to achieve the desired results,” says the CAG.