Discoms suffering revenue loss of up to Rs. 8,830 a year

The cost of power supply in Haryana has increased by 330% during the last ten years as against the tariff hike of merely 27%, causing a huge loss to the distribution companies.

The cost of power supply in Haryana has increased by 330% during the last ten years as against the tariff hike of merely 27%, causing a huge loss to the distribution companies.

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The gap between cost of supply and rate of return has increased to Rs. 2.50 per unit. The Dakshin Haryana Bijli Vitran Nigam and the Uttar Haryana Bijli Vitran Nigam are collectively suffering a loss of up to Rs. 8,830 crore annually.

Devender Singh, chairman and managing director, DHBVN and UHBVN said that cost of purchase of power has increased in the state by 335% on account of fuel price rise, coal shortage, etc, causing increase in cost of power supply by 330% during last ten years. But, there had been only two tariff hikes during this period; 11% in October, 2011 and 16% in April, 2012.

To meet their operating expenses, the discoms had to borrow so much that their total debt amounts to about Rs. 19,000 crore.

He said that the Financial Restructuring Programme (FRP) has given relief to the discoms from the pressure of payment of loans for three years. The state government has also shared 50% responsibility of the debt.

Under the restructuring, the payment of the remaining principal amount of loans has been deferred for three years. With this development, the banks would resume disbursement of loans to the discoms. It is now expected that as a result of FRP, the gap between average revenue realized per unit and average cost of supply will turn positive in next three years.

He said power engineers and workers of discoms have been asked to reduce the cost of supply by 60 paise per unit by reducing the rate of AT&C losses from 30% to 15%.

Moreover, for the next six months, extensive plans have been prepared to strengthen distribution infrastructure in rural and urban areas.