The Hindu : Delhi's slide in power performance rating

Online edition of India's National Newspaper
Tuesday, Jan 21, 2003

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Delhi's slide in power performance rating

By Lalit K. Jha

NEW DELHI JAN. 20. Delhi, reeling under a severe power crisis for over a fortnight now, has been placed seventh in the first performance rating of State power sectors.

Andhra Pradesh, Karnataka and Haryana have bagged the first three positions respectively in the performance rating that has been carried out jointly by two reputed rating agencies, CRISIL and ICRA, on behalf of the Power Finance Corporation at the instance of the Union Power Ministry.

The rating of 26 States, including Delhi, would be used by the Union Government for preferential allocation of funds under the Accelerated Power Development and Reforms Programme (APDRP), the interest rate setting or allocation of power to the deficit State from the Central Pool, senior Ministry officials said. "The exercise would be carried out every year,'' they added.

Given its rating and the points allocated to the Capital by the two credit rating agencies, it might be easy for Delhi to get funds from the Union under the APDRP, but it will face difficulties when it comes to allocation of power from the Central Pool as its performance in transmission and distribution losses is far below expectations.

The recent statements of the Union Power Secretary, R.V. Shahi, where he blamed the Delhi Government for the ongoing crisis in the Capital, has come only after this report was submitted to the Ministry on January 8.

Key factors leading to an improvement in Delhi, the report said "would be Delhi Government's implementation of a hike in tariffs for domestic consumers, a policy statement for the treatment of outstanding dues of the erstwhile Delhi Vidyut Board, implementation of anti-theft legislation by it and achievement of efficiency targets by the private Discoms.''

One of the major highlights of the report is that while Delhi is ranked second, after Andhra Pradesh, in the section of power sector reforms, it is rated 13th in crucial factors like generation, AT&C losses and financial risk.

Besides, the top three States, the Capital ranks below Rajasthan, Maharashtra, Gujarat, Himachal Pradesh, Tamil Nadu, Punjab, Jammu and Kashmir and Goa in this section. Overall, on a scale of 100 Delhi has scored 52.5 as against Andhra's 71.5.

The report said, in the post privatisation scenario, the stance of the Delhi Government towards hike in domestic tariff is yet to be demonstrated, which, it argued, is essential to meet the power cost of Discoms. "Delhi Government would also have to move towards speedy implementation of the anti-theft legislation, that would enable Discoms to curb effectively power theft,'' it said. Power theft in Delhi is to the tune of 1,000 MW in a demand of 3,200 MW, Mr. Shahi had said last week.

Appreciating the constructive role of the Delhi Electricity Regulatory Commission in carrying out reforms and rationalisation of tariff structure, the report has called for DERC to be a three-member commission instead of only one member. "The presence of members with a finance and legal background would have probably led to the formation of a relatively balanced quorum. However, the ability of the DERC to implement a similar tariff hike (as was done during the DVB days) and strong efficiency directives in the post privatisation scenario is yet to be demonstrated,'' it said.

Further, the report said, strong efforts need to be made to improve the operational performance in terms of billing and metering. "Other improvement in the T&D performance include a reduction in transformer breakdown rate and overdrawal from the grid,'' it said. The Delhi Transco is known for breaking grid discipline and overdrawal of power on large-scale.

On the financial aspects, though the report has appreciated the Delhi Government's decision to transfer the high post losses of the DVB to a Holding Company as a result such burdens have not been passed on to the private Discoms, the Sheila Government has been pulled up for not coming out with a policy statement on how these liabilities would be treated. The tripartite agreement for securitisation of power purchase dues has also yet to be signed, the report concluded.

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