Delhi Electricity Regulatory Commission (DERC) gave a red signal to BSES’s plans to pass on costs amounting to Rs 950 crore to consumers. Delhi Electricity Regulatory Commission (DERC) in an affidavit before the appellate tribunal has accused the Reliance group discoms BSES Yamuna and Rajdhani of misrepresenting the facts for making a false case for tariff hike in the Delhi. The reliance group discoms have played a fraud in course of procurement of capitol goods from its related company Reliance Energy Limited as per documents available with the commission.
DERC has stated in its affidavit that the purchase of Distribution Transformers by BSES discoms from its sister concern M/s Reliance Energy Ltd is also at inflated rates, The transformers were purchased from Reliance Energy and found to be exorbitant and the rates were higher by 68 percent from the market rates. The regulatory commission which procured the VAT bills showed that the material was sold for 731 crores and the discoms showed an inflated price with profit margin of 68 percent and tried to pass on the buck to consumers.Procurement of equipment by reliance backed discoms at higher rates amounts to loading the extra cost on the consumers of Delhi and further to give undue profit to the Discoms as well as the supplier which is the sister company of BSES. The controversial issue was first discovered by DERC in 2004 and the commission alleged that the discom had committed a fraud and initiated an inquiry. The discom stuck to its stand that the transaction was done through competitive bidding and it had not favoured its sister company.
Sources also said that the Rs 950-crore figure was under a cloud since, technically, BSES should not have shown it as capital expenditure in the first place but should have staggered the cost of the equipment purchased over the life of the equipment.
A senior DERC member said there are “glaring disparities” in a rejoinder submitted by BSES that “shed doubt on authenticity” of the documents. Besides, the member said, “BSES had filed a 1,000-page petition seeking a tariff hike before the Tribunal. Why did it not include the documents now submitted as evidence in that petition?”The DERC’s affidavit says that the discom had “ample opportunity” to produce documents during the earlier public hearing at the time of fixing power tariff. But, the affidavit says, “BSES neither relied on the documents nor filed them at the time of the hearing”.
It says: “Many documents, now sought to be filed (by BSES) as fresh evidence, are on the face of it not genuine.”The affidavit says the letters handed over by discom to prove that it had approached two other firms, besides REL, for the contract appears “not genuine”. “There is no evidence of the letters having been sent,” it says.
The issue relates to a petition filed by BSES earlier this year seeking a tariff hike to support costs of buying equipment required after the power sector was privatised. But the DERC claimed that the discom could have saved close to Rs 950 crore if it had bought the equipment from other providers, and not its “sister concern — REL”.
A DERC member said: “It would be disastrous if consumers were forced to pay just so that a firm can make profits. In response, BSES has submitted us documents to show that it followed norms of competitive bidding while selecting the provider. But their evidence is flimsy, and as our affidavit states, the documents are inconsistent.”
BSES, meanwhile, refused to respond to the allegations ahead of the hearing at the Tribunal. “The case is under trial and hence we do not want to discuss it right now,” a BSES official said. “A response will certainly be made at the Tribunal.”
Meanwhile, it has also emerged that the Delhi government had requested DERC to conduct an inquiry into BSES’s dealing with Reliance Energy Limited almost two years ago. In a letter he shot off in November 2006, then Principal Secretary (Power) Rakesh Mehta had mentioned about the issue to the DERC chairman. “It has been stated that electricity meters were imported by Reliance Energy Limited for both BYPL/BRPL at a higher cost to the tune of Rs 1,233 crore during the year 2004-05,” the letter states. There is a need, it says, “to inquire into the matter by the Commission.”
Courtsey- Indian Express