Capital discoms bought overpriced equipment for yrs

Delhi’s private power distributors grossly overpaid for all electrical equipment they bought all these years even though the same were available far cheaper in the market, an official assessment has found reports Avishek G Dastidar.

Delhi’s private power distributors grossly overpaid for all electrical equipment they bought all these years even though the same were available far cheaper in the market, an official assessment has found.

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Sources at the Central Electricity Regulatory Commission (CERC) said the difference between market rates and rates paid by the discoms are large enough to reek of some foul play in the numbers.

This concerns the consumers because discoms’ return on investment is nothing but public money — either through a tariff hike or government subsidy.

“Delhi discoms stand

to profit by showing bigger expenditure because they get a neat 14-16 per cent return on the purchase of items

like transformers, meters, cables, etc.,” said a senior CERC official, on condition of anonymity.

“Why should something that is available for Rs 100 to others across the country be sold for Rs 500 only to the private discoms?”

Delhi’s discoms have currently submitted accounts of their capital expenditure to the power regulator and are hoping to get returns on their numbers, including certain previous year’s expenses.

The assessment of the prices, conducted by Forum of Regulators (FOR), an umbrella body of all power regulators, has studied around 20 distribution utilities across the country to arrive at a list of “benchmark rates”. “The benchmark rates are to help regulators do prudence check on expenditure quoted by discoms,” said Alok Kumar, Secretary, FOR.

“Regulators could choose to probe further if the deviations are too wide.”

The difference between the benchmark rates and that paid by the private discoms is too wide to ignore.

Meters and metering equipment, for instance, came for Rs 1,300-1,800 across the country, but for Delhi discoms, they cost more than double.

The benchmark rate for 33 KV overhead-line is Rs 3.6 lakh, but both BSES and NDPL showed bills which were 100-200 per cent more for procuring the same.

The benchmark cost for 33 KV underground lines is Rs 24 lakh to Rs 40 lakh, but the discoms bought them for prices between Rs 55 lakh and Rs 61 lakh. The list goes on.

But discoms claimed they went for quality.

“Our suppliers have to pass stringent quality tests. So we go for a vendor if the quality satisfies us even if the price is not the lowest in the market,” said Sunil Wadhwa, CEO, North Delhi Power Limited. “We paid more because we do not compromise on quality,” said a BSES official on condition of anonymity.