Power privatisation on right track

Power reforms in Delhi is at a crucial stage. The government believes that the privatisation exercise is on the right track and the rest of the country can learn from Delhi’s experience in successful power reforms. Arun Goyal, Special Secretary (Power) and CMD of Delhi Transco in an interview to Amitabh Shukla says that there are several achievements in the sector and the government can spare around Rs 1000 crore now on the social sector due to the gradual dismantling of the subsidy. Excerpts.

Q: What has been the achievements of the power sector reforms in Delhi?

A: Achievements have been on several fronts. Some of them are visible right now and others would be there for all to see in the next few years. At the time of the unbundling of the DVB, the government was pumping in Rs 1200 crore per annum in the organisation. This amount could have become around Rs 1500 to 1600 crore now. This year, the government subsidy is only Rs 300 crore and next year, it would reduce further to Rs 200 crore. The money saved from this exercise can now be used for social sector spending – in health education and other fields. The government outgo would become negligible in future and the power sector would become self-sufficient.

Q: Apart from this, what according to you are the other benefits accrued from privatisation?

A: The percentage of load shedding has reduced drastically after privatisation. It was 3 percent in the DVB days but now it stands at 0.84 percent. Moreover, DVB was finding it difficult to make the payments for the power purchase. Now, the payments are upto date and 100 percent. The combined AT &C losses were pegged at over 50 percent then, now it is around 40 percent. For the consumers, there has been a sea change in the billing options. They used to stand in long queues to pay their bills earlier, now there are several options and you need not go to the e counters to pay the electricity bills. The rate of distribution transformer failure then was 15 percent, it is a mere 0.5 percent now.

Q: The distribution companies in Delhi are running into profits but still tariff hike is being increased. Is there some flaw in the agreement signed between the discoms and the Delhi government at the time of privatisation?

A: Well, this is the domain of the regulator, DERC. In hindsight, we can analyse the agreement but at that point of time, it was perhaps the best decision.

Q: From the generation point of view, Delhi is not self-sufficient and depends heavily on other sources. What are the steps being taken to produce more power in Delhi?

A: At present, Delhi is not self-sufficient. However, we have three projects in hand which would go towards this direction. The Pragati II project would produce 330 MW of power. In addition, we have planned a power plant in Bawana with private participation. This would produce an additional 1000 MW of power. The third major project is the conversion of the Indra Prastha Thermal Power Plant to gas based. This too would give us 1000 MW of power.

Q: Curbing power thefts is crucial to the success of power reforms. How many courts do you have to try cases of power thefts?

A: At present, we have two courts but we want to increase the number to 6. Probable locations have already been seen and the process is on for setting up the remaining four courts as early as possible. This would expedite trial in all cases of power thefts.

Q: What lessons can the rest of the country learn from the power privatisation exercise in Delhi?

A: Power reforms in Delhi has been largely successful. For every state of the country, subsidising power and pumping money in this sector is a tremendous burden. The state governments have to bear the losses of the State Electricity Boards. The Delhi reforms has shown that the sector can become self-sufficient and the money pumped in the sector can be used for the social sector. (27.8.2005)