Even though the Delhi government claims to have initiated a series of measures over the last few months to improve the condition of Delhi Electric Supply Undertaking (Desu), little seems to have changed. Worse may follow if remedial measures are not taken to improve the finances of the undertaking.
The major issue before Desu is to reduce T&D losses, which are around 45 per cent. According to Desus own figures, electricity theft by those staying in hutment clusters account for a mere seven per cent while theft by licensed and illegal industries is estimated to be as high as 67 per cent. However, the T&D losses in the New Delhi Municipal Council (NDMC) area, where most of the VIPs including the President and the Prime Minister reside, is only 13 per cent.
In contrast, of the T&D losses that Desu incurs in the capital, 55 per cent is due to the inability of officials to raise bills even though electricity is being supplied to legitimate consumers. According to Desus figures, the balance can be accounted for on the account of actual T&D losses and theft by hutment clusters.
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According to a Delhi government finance department official, nearly 18 months ago, against the monthly expenditure of Rs 170 crore, Desus income was around Rs 100 crore. The figure now stands around Rs 125 crore but cannot possibly go up any more, the official said, unless theft by industrial units is curbed.
Significantly, most of the legal action that has been initiated by Desu against electricity theft has been against retail customers rather than bulk consumers. A large number of industrial units underdeclare their load and steal electricity to meet their requirements.
According to a Desu official, the government should realise that instead of begging for power from the northern grid, it would pay in the short run if industrial theft is reduced, if not eliminated completely. Hence, it would make sense to make investments in transmission and distribution, as a short term measure, he said.
Desu buys power at Rs 1.70 per unit and sells it to household consumers for 60 paise per unit and industrial consumers at Rs 2.40 per unit. If handling and distribution costs are added, we may just break even if we charge everyone at commercial rates, says an official. To make matters worse for Desu, the power tariff, always a politically sensitive decision, has not been revised for over three years.
In 1989, the Union government had written off Rs 1,400 crore that Desu owed to various central government organisations. Since then, the accumulated losses of the undertaking has touched Rs 5,000 crore, with nearly Rs 700 crore being added every year.
Although several new colonies ahve come up over the last few years, there has been no addition to the installed capacity, barring a 102 mw combined cycle plant at Rajghat.
The power purchase agreement of the Bawana plant has not been signed since Reliance is reported to have asked for counter guarantees.
While the Union government has ruled out counter guarantees for new power projects, Delhi not being a full fledged state cannot give counter guarantees on its own.