A reduction in the cost of purchasing power and a revenue increase of Rs 733 crore has reduced the losses incurred by the Maharashtra State Electricity Board (MSEB) to Rs 308 crore in 2001-02. The board's cost of purchasing power has declined to Rs 1,278 crore in 2001-02.
The state electricity board incurred losses to the tune of Rs 1,681 crore in 1999-00 that rose to Rs 2,842 crore in 2000-01.
The white paper on Maharashtra power sector reforms recently submitted to the state government explains that the high cost of power during 1999-00 and 2000-01 was mainly due to the purchase of power from the Enron-promoted Dabhol Power Company (DPC) phase I project. Since May 2001, the MSEB had discontinued drawing power from the DPC project.
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Revenue generations in the last fiscal saw an increase by Rs 733 crore. MSEB's current level of receivables is pegged at Rs 7,114 crore, which is equal to seven months of the MSEB's sales turnover, with the board enjoying an average sales to the tune of Rs 1,000 crore per month, the white paper states.
Of the receivables, an aggregate amount of Rs 5,226 crore has been outstanding for over a year, excluding the receivables from Tata, Mulla Pravara and inter-state power transactions.
Till 1998-99, MSEB was enjoying a annual net profit of Rs 21 crore and preceded by a Rs 37 crore profit in 1997-98. MSEB's fiscal woes, apart from the high cost of DPC power and the increasing quantum of pending receivables, had worsened in the wake of a marked reduction in loans from the Maharashtra government.
While the state government loans comprised of 38 per cent of MSEB's annual plan outlay, it came down to 13 per cent, which has affected the cash availability with MSEB to pay its creditors, suppliers and to make investments in generation, transmission and distribution projects.
In addition to this, the high tariffs charged on high-paying industrial consumers, who subsidise the cost of electricity for domestic and agricultural power consumers, has led to many industries setting up their own captive power units. At present such captive power units in Maharashtra have a capacity of 641 mw.
According to the white paper estimates, around Rs 18,750 crore would be required over the next 10 years to reduce technical losses of MSEB, increase distribution network and strengthen rural electrification.