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Home News Power Sector News Jayalalitha asks centre to meet 40,000 crore loss of TNEB

Jayalalitha asks centre to meet 40,000 crore loss of TNEB

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JayalalithaTo bail out the Tamil Nadu Electricity Board (TNEB), chief minister J Jayalalithaa has sought Rs 40,000 crore from the Centre but the power managers here feel tariff revision is the only way out. From 2008, the demand for power in the state has gone up substantially due to sudden growth in industries and IT sector. But there has been no corresponding addition to the generation and TNEB has been forced to buy power from outside.

Now, the total demand is 11,500 Mega Watts (MW) and the availability of reliable power about 10,000 MW, including around 1,800 MW bought from the open market.

This gap is being managed through measures like load-shedding. "We spend Rs 1,500 crore every month on power purchase with companies with which we have long term power deals," said a TNEB source.

The purchase of such a huge quantum of power on a daily basis has caused substantial financial strain, with the accumulated losses going up from Rs 4,900 crore in 2005-06 to Rs 38,000 crore on March 31, 2011. During 2008-09, the revenue was Rs 1,7644 crore and the expenditure Rs 25,414 crore a deficit of Rs 7,771 crore. In 2009-10, the income was Rs 18,846 crore and expenses Rs 28,526 crore a loss of Rs 9,680 crore. In 2010-11, the income was Rs 22,341 crore and the expenses Rs 33,291 crore a loss of Rs 10,950 crore.

Similarly, the TNEB's outstanding debt rose from Rs 9,300 crore in 2005-06 to Rs 40,300 crore in 2010-11. "The accumulated losses are mainly due to borrowing from banks to meet expenses and repay loans and for power purchase. We pay Rs 400 crore in interest. We have not defaulted even once," said the source.

Now, the government has sought Central assistance "but we do not think any aid would be given. The Electricity Act says the cost of supply should match the rate of realisation. Nobody prevents us from increasing tariff. If this is done, TNEB will be saved," said the source..

The loss due to lack of any tariff revision over the years is alarming. In the domestic sector, the cost of power is Rs 5.50 but is supplied between 70 paise and Rs 4.70, causing a loss of Rs 3,500 crore. In the agriculture sector, the expenditure for free power is Rs 6,000 crore, but the government subsidy is only around Rs 250 crore. The loss from the domestic and agriculture sectors is Rs 9,500 crores, a major part of the annual Rs 10,000 crore deficit.

Power managers feel the government should enforce a reasonable increase in tariff and subsidy at least after the local body polls. "Tariff revision is vital. During the AIADMK rule between 1991 and 1995, the tariff was revised five times," said the source.

Source - Times of India


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