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The Odisha government is set to modify the Capital Expenditure (Capex) scheme meant for trimming aggregate technical & commercial (AT&C) losses of distribution companies (discoms).
The outlay under the scheme is proposed to be raised to Rs 3,000 crore from Rs 2,400 crore presently. The additional Rs 600 crore will be provided as loan by the state government to target areas like AB (aerial bunched) cabling, high voltage distribution system (HVDS) and metering.
The scheme modification is targeted at faster reduction of AT&C loss in the state that stands at nearly 40 per cent.
Of the original outlay of Rs 2,400 crore, the state government was to provide Rs 1,200 crore and the balance Rs 1,200 crore was to come from the discoms as counterpart funding. The state government’s contribution of Rs 1,200 crore included a grant of Rs 500 crore from the Government of India.
Though the Capex scheme was launched in 2010-11, effective implementation started from 2012-13.
Implementation of Capex has suffered due to inability of three Reliance Infrastructure controlled firms — North Eastern Electricity Supply Company of Odisha Ltd (Nesco), Western Electricity Supply Company of Odisha Ltd (Wesco) and Southern Electricity Supply Company of Odisha Ltd (Southco) to provide the counterpart funding.
Since the three discoms were piling up losses, they were not in a position to raise debt. Presently, the assets of Nesco, Wesco and Southco are hypothecated to state owned bulk power purchaser Gridco, There is a proposal to de-freeze assets of these discoms.
As per the Capex scheme, the discoms were to slash AT&C losses by three per cent per annum in their areas of operations.
But due to delay in execution of loan agreement, delay in finalisation of technical specification of materials, delay in placement of work orders as well as non arranging of counterpart funding by Reliance Infrastructure controlled discoms, the work could not be executed in project areas as per schedule.
Consequently, the envisaged AT&C losses could not be pruned, forcing the government to revise the completion of Capex programme till March 2014.
One per cent reduction in AT&C loss could fetch Rs 80 crore to the state exchequer.
