The second report of the Madhav Godbole-headed energy review committee on the power sector reforms has blamed government interference and an irrational power subsidy given to 90 per cent of consumers in the state as ailments of the Maharashtra State Electricity Board (MSEB).
The report recommends phased privatisation to turn the state electricity around from the red.
"The government's interference in the operations of the MSEB has not only distorted the tariff structure, but limited the action taken against defaulting customers also. Receivables and bad debts of the electricity board have thus increased over the years. Both these factors have adversely impacted the operational efficiency of the distribution business," the report says.
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It notes that during the process of reforms implementation (expected to be carried out over five to seven years), the MSEB should not undertake large investments.
The report has sought more transparency in informing the Maharashtra Electricity Regulatory Commission (MERC) so that the regulator could get sufficient basis for embarking on a multi-year regulatory approach.
The committee's main suggestions are:
I) Energy audit to move from the division level to the substation level
ii) Improvement in cash collection and information
iii) Information on theft of power in a manner that the metered data is matched with cash collections in the area
iv) Identification and estimation of any contingent liabilities
Similarly, the report has also recommended immediate steps to improve MSEB's performance in the short run as follows:
I) Rationalisation of MSEB's workforce, to include reallocation of employees from staff functions to field positions, in customer service and maintenance functions
ii) Reduction of commercial payables to lest than two months of consumption of fuels and consumables plus purchase of power
iii) A campaign for regularisation of unauthorised connections and legal action of disconnection in case of non-payment of charges as well as publishing the list of the 10 biggest defaulters in local newspapers.