Power reforms switched off

The Centre's nationwide drive to cut power losses through the APDRP scheme has, instead, seen them escalate in states like MP and Bihar

By Amiya Jha

There is no shortage of bad news for the Union power ministry these days. The hundreds of crores it has been pouring into states since 2001 to cut power losses as part of its Accelerated Power Development and Reforms Programme (APDRP) and to improve the distribution companies' financial viability have melted to nothing. Instead, what has happened is that the losses, rather than coming down, have mounted manifold—as though the programme itself were in some way to blame.

It's a quixotic predicament. Simply put, it's been a case of give more and get less—particularly in Bihar and Madhya Pradesh. As power secretary R V Shahi noted at a recent meeting called to review the implementation status of the APDRP, some states, including Madhya Pradesh, were setting a bad precedent for the others in the execution of projects. He said that if things failed to improve, the power ministry might be forced to stop funding the APDRP.

So what's going on? A good question, especially if you're aware that in 2001, Rs 40,000 crore was approved under the 10th Five-Year Plan to implement the APDRP scheme in over 600 towns and cities. Half this sum was earmarked as Central Plan assistance to help states upgrade and modernise their transmission and distribution networks, and the rest as an incentive for performing states.

But, in Madhya Pradesh, of the 48 cities currently under the APDRP scheme, aggregate technical and commercial (AT&C) losses in 21 cities were still running over 50 per cent. Even in cities where the state has succeeded in reducing AT&C losses, these were still far from meeting the target of 15 per cent set under the scheme.

Of the other states, Gujarat, West Bengal, Haryana, Maharastra, Andhra Pradesh, Rajasthan and Goa have been able to achieve some success in implementing the scheme and become eligible for incentives from the Centre.

As for the poorly performing states, the Central authorities would be satisfied if the chairpersons of the state electricity boards (SEBs) were to detail the number of vigilance raids, FIRs, convictions, disconnections and penalties that their offices are required to record every month, which they've not been doing.

A concerned power ministry has now shot off warning letters to the heads of the electricity boards in Bihar and Madhya Pradesh. The letters, sent by Arvind Jadhav, joint secretary in charge of APDRP in the power ministry, make a common basic point: the high AT&C losses “just about indicate” that the message has not “percolated to the field staff” (it apparently takes five years for messages to percolate down to the staff in these states).

In Bihar, for instance, 15 APDRP schemes were approved in July 2002, budgeted at Rs 854.05 crore and covering 30 district headquarter towns. But, the letter says, the state “utilised” (not quite the word under the circumstances) only Rs 219.55 crore—or just 26 per cent of the sanctioned amount.

“You are also aware,” the letter adds, “that the main objective of this programme is to reduce AT&C losses below 15 per cent. However, in a recent review of APDRP schemes in Bihar it is observed that except for PESU [Patna Electric Supply Undertaking] (West), AT&C losses during 2004-05 for all remaining towns were above 50 per cent and that AT&C loss has increased in [a] few of the towns.”

Most shocking of all, it notes an actual growth in Bihar's power woes after the APDRP scheme was kicked off. Were the funds then being “utilised” to ratchet up the losses? The letter does not ask this, merely cautions that the scheme “may” have to be “reviewed” in case Bihar failed to improve. And the scope for the said improvement, it turns out, is vast. The letter lists the areas where the badlands are almost never seen in action: energy auditing, accountability, watch on power theft, vigilance duties, metering, billing, collection, monitoring of AT&C loss reduction, the distribution failure rate, trippings and outages per feeder.

Madhya Pradesh gets the second prize for poor power reform performance. The state was sanctioned Rs 663.20 crore to implement 48 APDRP schemes covering 48 towns, and Rs 129.87 crore were released immediately. But here, too, the officials seem not to have known how to use up the entire sum, spending only Rs 150.66 crore, or about 38 per cent of the sanctioned amount. And, as in Bihar, there is nowhere any evidence to suggest that AT&C losses have been brought below 15 per cent. Madhya Pradesh, too, has been “requested” to send in its monthly report card. In fact, of the 48 towns where the programme is being implemented, 21 have reported AT&C losses of more than 50 per cent.

Having dispatched the same do-the-needful list to the state, the power ministry wisely concludes that wherever APDRP implementation was above 25 per cent, it should be possible to bring down AT&C losses to below 15 per cent.

Yet, while the states are doubtless the prime culprits, no player in this nationwide theatre of the absurd comes out wholly blameless. On the face of it, this should seem odd, considering
the initiative involved such reputed bodies as the National Thermal Power Corporation, the Power Grid Corporation of India, Central Power Research Institute, Metallurgical and Engineering Consultants (India) Ltd, Water and Power Consultancy Services (India) Limited, National Productivity Council and Electrical Research and Development Association.

But, for all their meticulous planning, none of them appears to have considered the ground realities: the men who would be “utilising” those wasted crores or the odds they faced. Why is it only now being acknowledged that the task was handed over to a poorly-motivated workforce? Why is it that the scheme's originators failed to draw up a comprehensive blueprint for pre-empting power thefts? Why is there no mention in their reports of the extent of the problems arising from stolen power? Or of the violence that invariably follows the severing of illegal connections? Who will protect the workforce? And how did those exquisitely contoured roadmaps hope to counter overnight the decades-old system of patronage and bribe-giving that the linesmen themselves were part of and encouraged?

The reality checks have come not a day too soon. Since the NTPC and Power Grid Corporation were tasked to periodically monitor the progress of the APDRP-designated distribution circles, they ought to have sounded the alert much earlier. They, and the other high profile consultants, must explain just how intensive were their field surveys before the reform cheque was cleared.