Discom infrastructure under scanner

Thursday’s decision comes after complaints poured in through the entire summer on the continuous breakdown of equipment in the distribution networks of all three discoms — BRPL,BYPL and NDPL.

The DERC order announcing this decision states: “During the course of the public hearing on loadshedding,consumers pointed out that the required infrastructure has not been put in place and frequent breakdowns were indicative of poor distribution network despite huge capital expenditure (money spent on infrastructure) allowed to discoms. Similar accusations were made earlier by consumer representatives in course of public hearings on tariff fixation for 2009-10.”

The investigation will be on the capital expenditure claims made by the discoms ever since power was privatised in the Capital seven years ago. The total claim by all three for the entire period is over Rs 6,000 crore.

The DERC has asked the Administrative Staff College of India (ASCI) in Hyderabad to check the assets of discoms. The ASCI will submit its report by February 28,2010. It has done similar work for the Maharashtra Electricity Regulatory Commission and with the Forum of Regulators.

The order says consumers have complained at various public hearings that “the distribution network is ramshackle,especially in areas served by BSES companies.”

The regulator also says that the innumerable breakdowns each summer that lead to prolonged outages are “indicative of a poor distribution network.”

Terming the investigation “the need of the hour” the DERC has said the verification of their assets would go a long way in instilling “public confidence” in the system.

The order,which is particularly harsh on the two Reliance-owned BSES discoms,BRPL and BYPL,raises questions not only about whether the companies are being truthful with expenditure figures,but also questions the transparency of procedures followed to acquire the infrastructure.

It says the inability of BRPL and BYPL to furnish year-wise figures on the “amount of capitalisation” casts “doubt as to the reliability of the books of accounts maintained by these two companies. Similar exercise conducted in case of NDPL also revealed that they also did not adopt transparent competitive bidding process to purchase goods”.

2- 09: Claims on capital expenditure BRPL Rs 2463.64 crore
BYPL Rs 1662.90 crore
Rs 1898.55 crore

Discoms will cooperate
We welcome the order as it will,once and for all,set to rest all claims about misrepresenting capital expenditure. The BSES discoms will cooperate fully with investigator
l Saxena,BSES CEO

Our infrastructure has been verified by internal auditors. Deficiencies were pointed out but we set them right before claiming expenditure. Wewill cooperate fully
l Wadhwa ,NDPL CEO