Cesco achieves break even

The proponents of power sector reforms in Orissa have finally something to rejoice amidst scepticism from various quarters about outcome of the process.

After nearly five years of privatisation of the distribution sector, the Central Electricity Supply Company (Cesco), one of the four distribution companies in Orissa, has made a significant turnaround in its performance by achieving break-even point for the first time in December last.

The company improved its revenue collection from Rs 47 crore in November, 2003 to Rs 51 crore in December enabling it to pay staff salaries, establishment cost, other statutory obligations as well as clear the bulk supply tariff (BST) bill of Rs 41 crore to Gridco.

"This is a no profit no loss situation", pointed out Srikant Paikray, the chief executive officer (CEO) of Cesco.

But reaching this position is a significant development considering continuous shortfall in revenue for last five years of the company's existence.

The company used to meet the revenue shortfall through relaxation of its escrow agreement with Gridco, which supplied bulk power to it.

The cumulative loss liability of the company now stands at Rs 568 crore while its outstanding on the consumers is to the tune of Rs 1100 crore. Of this, Rs 700 crore is payable by the domestic consumers while various state government departments owe the company Rs 177 crore.

One of the major areas, which helped the company to improve revenue realisation, is check of power theft. The distribution loss of the company which was 53 per cent in 1999-00 has come down to 39 per cent 2003-04.