PM sets up panel to suggest corrective measures to put a check on T D losses (04-Aug-2010)
The Transmission and Distribution (T&D) companies in the Indian power sector have been reporting losses of over Rs 40,000 a year. The Indian Prime Minister, Manmohan Singh, terming these losses simply unsustainable, has set up a panel which will be headed by the former Comptroller and Auditor General (CAG) V K Shunglu, to examine the reason behind such huge losses and suggest remedial measures in order to bring the companies back to profits.
The prime minister was concerned over the gradually increasing losses incurred by the public sector undertakings (PSUs) and insisted that the Chief Ministers of the states should pay personal attention to such unsustainable huge losses. He said “'These losses arise from low levels of aggregate technical and commercial (AT&C) losses. The total loss in 2009-10 is estimated at Rs 40,000 crore. This is simply not sustainable and unless corrected it will make the whole power sector unviable.'
The objective behind formation of such a panel is to assess the financial position of distribution companies and state electricity boards and to evaluation the managerial structure of the utilities. The panel will be instrumental in building a roadmap for achieving financial viability in distribution of power by 2017. A report by the set panel which includes former food secretary S K Tuteja, chiefs of Power Finance Corporation, Rural Electrification Corporation, Central Electricity Authority and representatives of SEBs and distribution companies will be submitted on February 28, 2011.
The Prime Minister has further stated that the 9% growth rate will not be achievable without power sector doing well and stated 'power sector is particularly important if we want to achieve 9 per cent growth. There are problems in the sector. One of these problems is the need to reduce the high level of losses in the utilities.'
As per the mid-term appraisal of the 11th Five year plan the AT&C losses are reducing but below the forecasted rate which are as high as 30 % and are a cause of concern for the weak Indian power sector. Major causes for the weakness are hefty losses booked by states like Jharkhand, Madhya Pradesh and Bihar which showed the tally of 51%, 45% and 40% respectively.
Meanwhile, the Associated Chambers of Commerce and Industry of India (Assocham) too has stressed need for building 'National Distribution Grids' to minimize transmission and distribution (T&D) losses that have exceeded 35% of India's total power generation capacity and has said that if India's power distribution system is not jacked up to suit modern energy requirements, the T&D losses will continue to happen and discourage investors to pump in their money into the power sector.
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