Companies deny charges of creating artificial losses to increase tariff
Aam Aadmi Party Convener Arvind Kejriwal on Friday accused two of Delhi’s three power distribution companies — Reliance Infrastructure-owned BSES Rajdhani and BSES Yamuna — of “fudging” accounts to project artificial losses in order to seek tariff hikes.
He called for an audit of the balance sheets of the distribution companies (discoms) by the Comptroller and Auditor General (CAG), and cancellation of the companies’ licences if they did not co-operate. He also said FIRs should be registered against the discoms.
Kejriwal blamed Delhi Chief Minister Sheila Dikshit of “working hand-in-glove” with the discoms and called for suspension of Delhi Electricity Regulatory Commission (DERC) Chairman P D Sudhakar. Kejriwal said Sudhakar was acting “merely as an agent”.
The Aam Aadmi Party chief demanded scrapping of tariff orders passed by Sudhakar over the past two years, implementing orders passed by former DERC chairman Berjinder Singh, and slashing power tariffs to half.
Sudhakar refuted the charges levelled by Kejriwal against him, saying DERC was an independent authority working under no pressure. “Mr Kejriwal is representing a political party. I do not know his motive. The commission did not reject Berjinder Singh’s findings. We dealt with it in our tariff order. His findings were based on certain assumptions which did not turn out to be correct,” he told Business Standard.
Responding to the charges, a BSES spokesperson said, “The allegations are completely baseless, wild and highly deplorable for the power sector. The issues raised have no relation whatsoever with the ground realities and are meant for personal gains.” The company added that while bulk power cost had risen 300 per cent in the past decade, retail tariffs had merely increased 65 per cent.
Kejriwal said that former DERC chief Singh had sought to bring down tariffs 23 per cent in 2010. “But Sheila Dikshit brought in Sudhakar as new chairman. He obliged and increased tariffs by 22 per cent in 2011, and 32 per cent next year. Whereas Berjinder Singh used to take action against these companies, Sudhakar started turning a blind eye,” he said at a packed press briefing.
He also claimed that the two Reliance Infrastructure companies created artificial losses by buying power at high prices and selling at much lower rates to sister concern Reliance Energy Trading Ltd (Retl). The two companies, in order to artificially increase expenses, showed purchase of equipment worth Rs 1,428 crore from Reliance Energy Ltd, he said.
Kejriwal used Singh’s draft tariff order of April 2010 to substantiate his allegations. Singh had proposed reducing Delhi power tariffs, arguing that discoms were making huge profits. While power distributors had projected Rs 630-crore loss for 2010-11, Singh had concluded that companies would make profits of Rs 3,577 crore. Singh’s order was based on projected profits from sale of surplus power available during lean periods from plants in future.
Delhi government dismissed the allegations. “The so-called tariff order (by Berjinder Singh) was nothing but the personal opinion of the chairman.” It added that it was also wrong to say that Delhi government was not in favor of a CAG audit, as was claimed by Kejriwal.
Kejriwal said that the discoms had shown power consumption of Delhi Jal Board and Delhi airport to be nil in 2008-09 in an attempt to show decreased revenue and increased losses. He also told the media that the discoms were showing consistent decrease in losses till 2010, but started showing increased losses when Sudhakar took over. “Discoms lied to Sudhakar and said that surplus power available was much less as some new plants could not start on time. According to the Central Electricity Authority, most of these plants have already started,” Kejriwal said.
Kejriwal did not make any specific allegation against the third discom — Tata Power Delhi Distribution Ltd. The company refused to comment.
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