The two power distribution companies (discoms) of Telangana have performed “poorly” in some of the key areas such as feeder segregation and smart metering although their performance was “excellent” in terms of metering of distribution transformers, providing electricity to unconnected households and distribution of LED bulbs.
During the 2014-19 period, the Rate of Real Return on Investment in the eight public sector undertakings (PSUs) in the power sector was negative ranging between -17.64% and -10.23%. Huge losses incurred by the discoms during the period had contributed to the overall losses of the power sector PSUs.
The observations were made in the Comptroller and Auditor General (CAG) reports for the year ending March 2019. As against the paid-up capital of ₹17,770.46 crore, the accumulated losses reported by the PSUs were ₹28,426.43 crore, resulting in a negative net worth of ₹10,655.97 crore.
SCCL contribution
Commenting on the implementation of UDAY (Ujjwal Discom Assurance Yojana) scheme, the Comptroller and Auditor General report stated that out of the total outstanding debt of ₹11,897.24 crore as on September 30, 2015, the State government took over a total debt of ₹8,923 crore up to 2018-19. Of it, ₹7,723 crore was released as on March 31, 2019 as the equity contribution and the balance of ₹1,200 crore was yet to be released.
During 2018-19, out of the eight PSUs only three companies – Singareni Collieries Company Ltd, TS-Genco and TS-Transco – have earned a profit of ₹2,587.6 crore with SCCL alone contributing 68.27% (₹1,766.66 cr) of it. Similarly, two PSUs – Southern Discom and Northern Discom – have incurred a loss of ₹8,018.7 crore, contributing substantially 99.97% of the total power sector PSU losses of ₹8,021.14 crore.
The net loss incurred by the eight PSUs was ₹5,433.54 crore during 2018-19 as against the loss of ₹1,907.03 crore incurred during 2014-15. The audit report pointed out that TS-Transco’s non-compliance with the ‘merit order’ despatch procedure during the period from December 2016 to March 2019 had resulted in an avoidable extra expenditure of ₹44.67 crore to the discoms.
The CAG report further pointed out that the differences in the figures of equity, loans and guarantees were pending reconciliation since long and suggested the government to take concrete steps to reconcile the differences in a time bound manner. The matter was taken up (February 2020) with the State Government and replies were awaited. It observed that the delay in finalisation of accounts carries the risk of fraud and leakage of public money going undetected and recommended that the State Government take appropriate steps expeditiously complete the finalisation of accounts.
