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The inclusion of private players as distribution companies have not led to better management and reducing commercial and technical losses.india Updated: Apr 04, 2007 00:12 IST
As summer arrives in the country, urban India prepares to tackle the all too familiar problems that come with the season. Right on top of the litany of woes lies the man-made problem of power shortage and the accompanying phenomenon of outages. Over the years, one paradox has emerged. As reforms in the power sector have been implemented across the country — with Orissa’s separation of generation, transmission and distribution in 1999, followed by privatisation providing the model — urban Indians have literally been left to their own devices to battle against power shortages that governments have not been able to rectify. It has become de rigeur for households and shops to have their own power generation devices. And yet, as wonderful plans to electrify all of India are spouted with gusto, electricity has become a commodity that the State expects its citizens to generate by themselves.
At the root of the problem lies skewed expectations from power privatisation. Whether it be the Delhi Vidyut Board or the Maharashtra State Electricity Board, the inclusion of private players as distribution companies (discoms) have not led to better management and reducing commercial and technical losses. One of the main culprits is the absence of universal metering. Many discoms have as much as 30-40 per cent of its energy un-metered, such as in agriculture and street lighting. The transmission and distribution losses that were supposed to have been stemmed by private discoms are yet to show real change. Add to this the massive arrears of state governments (Maharashtra’s unpaid bill is around Rs 9,500 crore) and that of ‘politically sensitive’ institutions such as agriculture and textiles (powerloom industries in Biwandi and Malegaon in Maharashtra owe nearly Rs 400 crore) and one gets a grim picture of supply-demand economics in the power sector.
The 2001 Kanango Committee Report on power privatisation indicts discoms for bad management skills and inadequate working capital. No government is ready to bite the political bullet. As a result, we are left to fend for ourselves one more summer.