'Our aim was to light up the Capital'

Lalit Jalan, 50, head of Delhi's two largest electricity utilities, has engineered a remarkable turnaround in the Capital's power situation. The era of chronic power cuts and voltage fluctuations is finally over. Jalan says his companies have lived up to the promise of delivering reliable and clean power. The irony, according to Jalan, is that “power is like air, nobody cares as long as it is there'. This is the basic reason why few have cheered the phenomenal transformation in Delhi's power scenario. Yet, the sea change brought about by BSES Rajdhani and BSES Yamuna, the two Anil Dhirubhai Ambani Group companies responsible for servicing the bulk of the Capital's power distribution, is beginning to be viewed as a case study in management success. And Jalan, who is a Wharton MBA graduate and an entrepreneur on his own right, is beginning to acquire a reputation of a turn around artiste, having restored Mumbai's power distribution first and then Delhi's. Other state governments too are making enquiries. Jalan, who heads the company's power distribution in Mumbai and Delhi, talks to Indranil Banerjie about how he fixed the Capital's power distribution mess.

The power situation in New Delhi was a mess at the time the bulk of the Capital's distribution was handed over to your company. Where have you come since then?
Power was the number one issue in Delhi for the media and the public at the time we took over distribution. A leading newpaper of Delhi had done a survey of the city's problems and electricity supply was on top in the list of 10 major problems. Today, it isn't an issue at all. It is taken for granted. And it should be, because power is a necessary service. In fact, power is like air, nobody cares as long as it is there. Today, you hardly see an article in the newspapers about power problems whereas 5 years ago, a single day did not pass without an article on load shedding. Power today is simply not an issue in Mumbai and Delhi. It’s only made an issue by certain NGOs and politicians who have some axe to grind.

Basically, we had made a promise to Delhi: We wanted the capital to be like Mumbai – a city enjoying quality power and freedom from gensets, inverters and voltage stabilizers. I think we have kept our promise. One indicator is the sale of stabilizers and inverters, which have fallen by 75 per cent this year.

How did all this happen?
We faced unlimited challenges and many felt we would not be able to fix a network degraded by 50 years of misuse, corruption, bad practices and substandard infrastructure. In the very first month we took over, we recorded 130 cases of transformer burnouts alone. Today, the transformer burnt out rate is almost nil. There were a myriad other problems. But we decided to make huge investments to upgrade the network. We had international experts to study the network and prepare a upgradation plan and chart out best practices. Our main emphasis was on introducing state-of-the-art technology, implement customer care systems, upgrade our workforce and replace obsolete and substandard equipment.

One of the technologies we are proud of is the SCADA system by which we can monitor the power situation throughout our distribution network in real time. Our SCADA control room is like a NASA control centre and attracts visitors from all over the country. We employ GIS (Geographical Information Systems) to monitor consumer complaints and identify areas of power theft. The entire city has been mapped and we can identify and locate consumers within seconds.
Coupled with our mobile repair vans and service personnel equipped with mobile phones, we can respond to consumer complaints and technical faults within minutes.

Fixing billing problems was another huge challenge. There was a big outcry over excess billing and our electronic meters. We ran campaigns to educate and assure consumers that we were not over charging them. We also opened 120 complaint centres and a call centre to record complaints. We developed a system whereby complaints to a call centre would automatically get routed to the consumer's local complaint centre. From here, repair personnel could be directly contacted on their mobile phones thus drastically cutting down the response time to consumer problems. We have even issued our meter readers with handheld devices to automatically download the meter reading.
We have been continuously perfecting systems to provide high quality and reliable power. To do so, we have invested over Rs 3,500 crores into the system and employ 7,000 personnel to run it. A huge amount of effort has gone into this. Today, we even have experts from Andhra Pradesh, which is considered to have the best run power distribution system in the country, coming to study our systems and expressing a desire to privatise.

Delhi's power rates are said to be the lowest in the country. So how do you manage to cope?
We buy power at different rates. The average rate of most of the power we buy is between Rs 2.50 and 2.70 a unit. However, when demand is high, we have to buy 'top up' power to meet the peaks in demand. This 'top up' is expensive, about Rs 7.50 a unit. Yet, we charge our domestic consumers just Rs 2.80 per unit. We can do this because we charge our commercial and industrial consumers a higher rate. We continue to buy expensive power especially during the summer months because one of our basic aims is to provide reliable, uninterrupted power. It does not matter if our bottom-line goes down. We also make up in time of power surpluses. For instances, currently we have a surplus and sell excess power to generate revenues.

At the end of the day, we save by being more efficient and having better equipment. Revenue losses have come down drastically. In the last 5 years, we have saved the Delhi government an equivalent of 3 billion dollars (about Rs 12,000 crores). So, in effect, we have given double benefit of votes and notes to the government: votes by ensuring that the power reforms promise has been kept and notes by the crores of rupees saved.

Yet your company has been saying that the power tariff hikes promised by the Delhi government have not materialised. Is that affecting your bottom-line?
It’s true that the promised hike in tariffs have not been met but we appreciate that this is a politically sensitive subject. As for our economics: About 80 per cent of our revenues go towards paying for power. If there is a 30 per cent increase in the cost of power, the money to pay for our power purchases have to come from somewhere. Basically, it can either be government subsidy or an increase in tariffs – or at best, a combination of the two. We are fine with whatever the government decides. At the same time, we are hopeful that the promised tariff hikes which have got delayed would be looked into very soon. Either we will get some subsidy or there will be a hike in tariffs. At the end of the day, someone has to pay for the power. Also, there is no doubt that our power rates are } cheapest in the world and certainly cheaper than those in any neighbouring city or any metropolis in this country.

Delhi is notorious as being the power theft capital of the world. How was theft tackled?
Power theft is an incredibly large problem in Delhi. It cuts across social and economic lines. The rich, the powerful, the poor, everybody is at it. We have had a cases of dairy owners using stolen power to generate hot water for their buffalos. Among them were Delhi ministers, who gave their numerous buffalos a hot water bath every day thanks to stolen power. They had dozens of immersion heaters in their water tanks and wires hitched to outside power lines brought the power. They were indignant when they were caught, saying that buffalos needed hot water or they would not produce milk!

We have caught thousands of people stealing power. The list is unending. Every day we continue to nab about 40 power thieves. In our two Delhi distcoms, theft has decrease by an average of 5 per cent a year whereas the government constituted Ibrahim Committee reckoned that theft could at best be reduced by about one per cent per year. We have had to introduce systems and procedures to tackle this issue as well. For instance, we map out areas with our GIS system and run analyses to home on to potential theft cases. Our anti-theft personnel have been beaten up and have had false criminal cases lodged against them. In the early days, we often found that our teams were being falsely charged of rape and molestation. So now all teams go out with a video camera recording all their actions while raiding a premise. They also take a local witness to counter false allegations.

We have taken actions against hotels, shops and the rich. We have not spared anybody. And today things are different. After all these years, the Delhi government has set up five special courts to speedily dispose of power theft cases and three battalions of the CISF have been provided to protect our staff. We have introduced practices which other power distributors like those from West Bengal, Punjab and Andhra Pradesh want to study and emulate. Power theft nevertheless continues to be a problem in Delhi.

It will end only when the culture changes.

Do you, or Reliance, have bigger plans for the National Capital Region as a whole?
We (Reliance Energy) are trying to set up a lot of power plants in the northern region because that is what is ultimately going to get rid of shortages. We have big plans: At Dadri we are looking at a 7100 MW plant, at Sasan 4000 MW, at Delhi 1600 MW and at Roza 1200 MW. A huge effort in the area of generation is required. Both the governments of Haryana and Uttar Pradesh are keen to add to their generation capacities. While Dadri and Roza are in Uttar Pradesh, Reliance is setting up a 600 MW Yamuna Nagar and 1200 MW Hissar plants for Haryana.