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

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
ACCUMULATED FINANCIAL LOSSES
As part of the restructuring process, the State Government, has undertaken considerable
settlement of the liabilities of UPSEB as indicated below:
Government of UP loan and accrued interest written off Rs. 20,116 crore
Adjustments for transfer of Unchahar Plant to NTPC Rs. 919 crore
CPSU liabilities retained by Government of UP Rs. 2,515 crore
The financial commitment taken by the Government during the restructuring of UPSEB
is further indicated below:
Terminal liabilities retained by the Government Rs. 6,176 crores.
GPF liabilities Rs. 1,634 crores.
Despite such massive write-offs, the State power utilities are proceeding on the same
path of mounting losses in their books. This is due to a variety of reasons including
operational performance, losses, tariff and recoveries from consumers. The average
recovery per unit of electricity is indicated as under:
Average Recovery Per Unit of Electricity
Consumer Category 2001-02 2002-03 2003-04
Domestic (%) 51 48 50
Agricultural (%) 22 26 25
Commercial (%) 106 117 116
Industrial (%) 108 123 124
Others (%) 56 50 62
Total (%) 69 72 73
Simiarly, the cash gap indicators, excerpted from the UPERC order of 2003-04 are
provided in the following table:
Cash Gap per Unit to Cover Cost
Performance indicators 2000-01 2001-02 2002-03
Collection per unit power input (Rs/ kWh) 1.21 1.26 1.39
Cost of power purchase per unit of input (Rs/ kWh) 1.59 1.57 1.81
Cash Gap to cover power purchase 0.38 0.31 0.42
Cost per unit of power purchase (Rs/ kWh) 2.06 2.04 2.53
Cash gap per unit to cover total cost 0.85 0.78 1.14
Thus, the cash gap in the system is leading to accumulation of losses in the books
of the utilities. The following are the key financial parameters of the utilities
during the pre-reform and post-reform periods:
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