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Home News Power Sector News Discoms need more discipline to bring down losses: KC Venugopal

Discoms need more discipline to bring down losses: KC Venugopal

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Venugopal KCExpressing concerns over the poor financial health of distribution companies, Minister of State for Power K C Venugopal said these entities should have more discipline in cutting down the losses. "The financial health of power distribution companies (discoms) is a major worry for us. They should have more discipline in reducing the losses," Venugopal told reporters.

Going by estimates, discoms incurred a staggering loss of Rs 70,000 crore last fiscal.

Speaking on the sidelines of the India Energy Congress at New Delhi, Venugopal said that losses of discoms have been rising over the years.

"There are political compulsions also from state governments. They are announcing so much of subsidies but that is not reimbursed to state utilities," he noted.

In his speech earlier, Venugopal said that historically, power distribution in India has been a weak link.

"We need to find ways and means to address the issues of distribution sub-sector and contain the financial losses," he added.

There are about 73 entities in the power distribution segment in the country.

As per report of the high-level Shunglu panel, net loss of 15 discoms -- which account for over 90 per cent of country's power consumption -- after subsidies was Rs 27,000 crore for the year ended March 31, 2010.

Another major issue facing power sector is the high Aggregate Technical and Commercial (AT&C) losses, which is around 28 per cent.

"With gradual tightening of efficiency norms and shifting to tariff-based procurement of electricity, I hope that the ultimate consumer will not be burdened with the cost of inefficiencies of generation, transmission and distribution," Venugopal said.

Source- Economic Times


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