State told to privatise distribution of power B. KRISHNA PRASADDC | HYDERABAD

State told to privatise distribution of power

B. KRISHNA PRASAD

DC | HYDERABAD

The private companies are fairly successful in reducing theft and line losses."

Planning Commission

The Planning Com mission has criticised stateowned power distribution companies for "failing miserably" and has asked Andhra Pradesh to speed up the privatisation of the sector to ensure better services to citizens.

In its mid-term appraisal, the commission has expressed concern over increasing commercial losses in power distribution in urban areas and pointed out that private firms were doing a better job. The total loss incurred by the distribution companies is estimated to be about `40,000 crore in 2009-10 alone. It is likely to rise to even higher levels because of the shortterm purchase of power at high prices.

"Unless urgent steps are

taken to overcome this problem it is difficult to imagine healthy expansion in the power sector," said the commission.

In Kolkata, CESC Limited is undertaking power distribution, whereas BEST is providing both electricity and transport service to Mumbai. Likewise, BSES Rajadhani, BSES Yamuna, and North Delhi Power Company are giving power to the national capital.

"When compared to government-owned distribution companies, the private companies are fairly successful in reducing theft and line losses," said the commission. Although the average tariff charged on consumers in India was one of the highest in the world the power utilities were not able to recover the cost of supply because of in-built inefficiencies, it added.

While the average cost of supply increased from `3.68 per unit in 2005-06 to `4.29 per unit in 2009-10, an increase of 16.2 per cent, the average tariff increased from `2.89 per unit to ` 3.38 per unit in the same period, about 17.4 per cent. The gap increased to around 91 paise per unit making it impossible to the power utilities to maintain profitable operations.

Mr Ajay Jain, chairman and MD of APTransco, said that commercial losses had been substantially reduced In AP.