KSEBOA - KSEB Officers' Association

Thursday
Oct 19th
Text size
  • Increase font size
  • Default font size
  • Decrease font size
Home News Power Sector News Reliance discoms can’t pass on Rs.535 crore to Delhi consumers - APTEL

Reliance discoms can’t pass on Rs.535 crore to Delhi consumers - APTEL

PDF
Hits smaller text tool iconmedium text tool iconlarger text tool icon
APTEL ChairpersonThe Appellate Tribunal of Electricity(APTEL) ruled that Reliance owned power distribution company (discom) BSES cannot pass on Rs 535 crore it had paid to its sister concern to buy capital goods to the consumer. This Tribunal has upheld a Delhi Electricity Regulatory Commission (DERC) ruling in this direction.

A senior DERC official explained after power distribution was privatised in the Capital, discoms had been directed to invest in capital goods — equipment among others. The purchase of Distribution Transformers by BSES discoms  from its sister concern M/s Reliance Energy Ltd was 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.

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.”

When BSES presented its accounts to DERC, the regulator cleared the base cost of capital goods but refused to clear the 68 per cent additional expenditure (Rs 535 crore), the DERC official said. In its appeal, BSES said REL deserved the profit being the intermediary. But the Tribunal turned down BSES’s appeal saying the discom did not carry out its purchases through competitive bidding and instead went directly to its sister concern.

“With the Tribunal upholding DERC’s decision to disallow this expenditure, BSES will not be able to pass on this cost to consumers by way of tariff,” the official added.


Source - Indian Express
 

Add comment


Security code
Refresh


 

Random Videos

You need Flash player 6+ and JavaScript enabled to view this video.
Title: Power Quiz 2015 Final - Part-1

Latest Comments

Banner

Reference Book

 

Reference Book on Power

Electrical Engineering-- D' 1/4 Size Hard bound-- 1424 Pages-- Just Rs.1000/- only &n...

Visitors Counter

mod_vvisit_countermod_vvisit_countermod_vvisit_countermod_vvisit_countermod_vvisit_countermod_vvisit_countermod_vvisit_countermod_vvisit_counter
mod_vvisit_counterToday3600
mod_vvisit_counterYesterday4631
mod_vvisit_counterThis Month85118
mod_vvisit_counterLast Month134230

Online Visitors: 66
IP: 54.158.238.108
,
Time: 21 : 44 : 11