Private power firms in Delhi slow to spend on upgrading infrastructure

Delhi's two private power distribution companies BSES and NDPL spent only Rs 373 crore of the Rs 1,009 crore allocated to them for capital expenditure in 2003.

The balance sheets of the companies, made available to the Delhi Electricity Regulatory Commission (DERC), show that they failed to upgrade their distribution infrastructure despite having adequate monetary resources.

The Delhi government recently announced a 10 per cent hike in power tariffs, drawing howls of protest from Opposition parties.

Power ministry sources said the tariff hike proposed by the DERC was unjustified as the companies, which were supposed to upgrade facilities, had not done their bit, so consumers should not be made to pay for it.

Before announcing the higher tariffs, Delhi Chief Minister Sheila Dikshit had sought former state Power Minister Ajay Maken's views on the issue. According to sources present at the meeting, DERC Chairman V K Sood had presented a proposal, forwarded by BSES and NDPL, for a 30 per cent hike in power tariffs.

"The power companies said they had suffered unexpected losses and wanted a tariff hike," said the source.

At this, Maken, who was power minister during the unbundling of the Delhi Vidyut Board, presented the companies' balance sheets and pointed to the lack of expenditure on transmission lines and transformers that would have improved supply and brought down their aggregate transmission and commercial (ATC) losses.

In 2003, of the Rs 365 crore allocated to BSES Rajdhani, the company managed to spend only Rs 36 crore. BSES Yamuna spent only Rs 37 crore of an allocation of Rs 297 crore for that year. NDPL had a better record, it spent Rs 300 crore of its allocation of Rs 348 crore.

According to sources, Maken said if the companies had not attempted to bring down their losses by improving supply, the consumers should not be penalised for it.