Report of Indian Institute of Public Administration ... - Ministry of Power

Orissa
• Very high T&D losses: 44 per cent as against declared value of 32 per cent;
• Commercial inefficiency: which resulted in accumulating unrealistic receivables
on the books;
• AT&C losses: around 55 per cent;
• Lack of commercial orientation;
• Manual accounting system and lack of control and checks on billing hardware
and software; and
• Unreliable power supply and lack of consumer services support.
• Subsidy/grant from Government of Orissa amounting to Rs 250 crore (in 1996).
All these resulted in huge revenue losses to OSEB.
Post-Reform Difficulties Faced
• Up-valuation of assets by over Rs 2,000 crore (128 per cent) resulted in increase
in BST by 24 paise per unit (cumulative financial impact Rs 590 crore);
• Unrealistic determination of distribution loss level targets in retail tariff
structuring. Retail tariff set at 32 per cent distribution loss level against actual
loss level of 42 per cent (cumulative financial impact Rs 358 crore);
• Non-recognition of collection efficiency. Retail tariff set at conventional
distribution loss level target without considering collection efficiency component
(i.e., the AT&C Loss concept);
• Retail tariff set with negative clear profit for consecutive seven years, which
resulted in financial sickness of DISCOMs;
• Billing to ghost consumers and bogus receivables;
• Excess manpower and inadequate qualified staff;
• The State Government withdrew subsidy support to the DISCOMs.The support
was to the tune of Rs 250 crore per annum;
• Non-payment of outstanding dues (amounting to over Rs 170 crore) by
Government departments/PSUs;
• Delay in receipt of the World Bank fund aggregating Rs 326 crore. This led to
non-achievement of desired result for reduction in technical losses;
• Delay in receipt of funds under Accelerated Power Development and Reforms
Programme (APDRP) for capex;
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