Srinagar: The Power Development Department (PDD) looks forward to increasing its yearly revenue by at least Rs 1000 crore by cutting down on transmission and distribution losses, a task it says will be accomplished by unbundling the department into four corporations.
Recently, Power minister Dr Nirmal Singh told Kashmir Reader that power sector will be privatised to reduce losses.
However, power officials say the word ‘privatization’ will be a misnomer because the department actually will be creating four government-owned corporations responsible for holding, production, transmission and distribution.
The unbundling is aimed at bringing down transmission and distribution (T&D) loss from the current 57%, the highest in India, to about 30%. The department looks to at least 15% reduction in losses in the first year of unbundling.
A PDD official said that reduction of one percent loss translates into revenue of Rs 50 crore.
“For a state like Jammu and Kashmir, aiming at T&D loss of 25-30% is realisitic. I don’t think that in immediate future we will be able to make it less than that. Still, a 27% drop in T&D loss means additional revenue of about Rs 1300 crore,” said the official who is part of the team overseeing the unbundling of the department.
The PDD spent about Rs 7000 crore on purchases and other expenditures, but earned only Rs 2000 crore in 2013. The deficit of Rs 5000 crore was met by grants from the government of India.
The government had in September 2012 ordered unbundling of PDD into government-owned State Power Transmission Company Limited, State Power Trading Company Limited, Jammu Power Distribution Company Limited and Kashmir Power Distribution Company Limited. Each company will be autonomous and headed by a managing director who will not have absolute powers as he will be accountable to the board of directors.
While PDD employees have warned of an agitation if the government “privatises” the department, consumers apprehend a steep rise in electricity tariffs. Power Development Commissioner Asgar Ali allays these fears.
“We are unbundling T&D sector of PDD, like we unbundled generation sector eight years ago by creating Power Development Corporation. There will be no private companies taking over the PDD as of now. The new corporations will be entirely government-owned corporation,” Ali said.
He said power tariffs will be fixed by the government, which will continue to be the regulating body.
But the PDD official Kashmir Reader spoke to, however, said that if T&D losses are reduced, the tariff might come down.