A K Bhattacharya: Let there be light

NEW DELHI DIARY

The outcome of a recent poll on how consumers perceive the power supply situation in Delhi should bring relief to those who may have lost all hope of the privatisation experiment succeeding in the Capital.

The controversy over a 10 per cent hike in the power rates had reached a level where serious questions were being raised over the correctness of the very decision taken in July 2002 to privatise the Capital's power distribution system.

There were protests by consumers. Politicians within the ruling party in Delhi and outside took advantage of the unrest and did their best to embarrass a chief minister who had made a valiant attempt to set right the state's messy power situation.

The tariff hike has now been rolled back, thanks to the grant of subsidy by the state government. Angry consumers have cooled down and the private power distributors""BSES and North Delhi Power Ltd (NDPL)""have one more year to improve their operational efficiency before the proposal for a fresh tariff hike comes up for scrutiny next year.

The poll outcome, at this juncture, is significant. If read correctly, it has important lessons for the private distribution companies as also the Delhi government.

What does the poll show? Forty-eight per cent of the respondents felt that the power situation has improved since the privatisation of distribution in 2002. What's more, 43 per cent of the respondents were clear in their minds that they did not want to go back to the previous regime run by the Delhi Vidyut Board (DVB).

You might argue that those who are happy with the fruits of privatisation are still not in the majority. And with 33 per cent of the respondents feeling that the power situation has not improved since the privatisation and 39 per cent of them wanting to go back to the DVB days, it might appear that the Delhi government as well as the private power distribution companies have a long way to go before they can live up to the consumers' expectations.

Two points need to be noted. Change in any system is rarely greeted with enthusiasm among users. Resistance to change is even more intense where deeply entrenched vested interests are threatened.

By privatising power distribution, Shiela Dikshit, Delhi's chief minister, dealt a big blow to powerful groups of vested interests""some officials of the erstwhile DVB and large sections of consumers who benefited from a system that tolerated and legitimised the theft of more than half the power supplied as commercial loss.

It took about three years for politicians to exploit this unholy alliance of interests and mount a successful campaign against a perfectly legitimate and justified exercise to introduce efficiency in power distribution through privatisation.

It is important to note here that the poll showing 43-48 per cent of the respondents happy with the privatisation experiment was conducted among consumers living in relatively affluent residential colonies.

Various surveys have shown that power theft in these affluent residential colonies is much more than in the much-maligned slums. So, it is a massive endorsement of the privatisation experiment when a poll conducted among such consumers of affluent localities shows that the number of respondents happy with privatisation is more than those who are not.

This is something that the Delhi government should take as a vote of confidence in what it did for its residents three years ago.

At the same time, the state government cannot ignore the other message. Their numbers may not be as large, but there are quite a few (33-39 per cent of the respondents in the poll) who are not happy with the power situation since the privatisation and would not mind going back to the DVB days.

The challenge for the Delhi government and the private distribution companies is to recognise this level of dissatisfaction among the consumers and work towards addressing their concerns through better and more efficient service.

If this requires investments in upgrading the power distribution systems and gadgets like meters, the distribution companies should lose no time in taking quick decisions on them. A faster pace of power loss reduction would not only help them regain the consumers' confidence, but may obviate the need for a tariff hike next year.

The challenge for the Delhi government is to break the unholy alliance that is growing between the disgruntled politicians and consumers who can no longer steal power in collusion with the authorities.

The best method to achieve that goal would be to empower the state power regulator and entrust with it the responsibilities of ensuring better service and quality of power for the consumers. No privatisation exercise is complete without a powerful and functioning regulatory system. Delhi cannot boast of one today.

Aggrieved consumers should ask the regulator to redress their grievances, quite unlike what happened in the last few weeks when the Delhi government had to step in to address the concerns of angry consumers.

Similarly, the government should provide adequate help to the distribution companies in recovering their dues from consumers and in punishing those who steal power. If that requires changes in the legal system, such initiatives should be taken without delay.

Equally important, the regulatory system should ensure that private distribution companies face more competition in the days to come. Consumers must know that if a distributor fails to deliver, they have recourse to an alternative. Only then will the privatisation experiment be seen to have met with success.

akb@business-standard.com