UP Power Corporation to cut losses by Rs 4,300 cr this year

Accumulated losses stand at about Rs 18,000 cr

Uttar Pradesh state power utility UP Power Corporation Limited (UPPCL) is looking to cut its losses by Rs 4,300 crore in the current financial year.

UPPCL has been incurring massive losses over the years, which touch about Rs 7,000 crore annually, including subsidy part of Rs 4,000 crore. The accumulated losses stand at around Rs 18,000 crore.

In 2000, loss-making UP State Electricity Board (UPSEB) was unbundled as UPPCL, with separate distribution companies (discoms) for operational efficiency in the power sector. However, the losses have continued to mount due to yawning gap between revenue and expenditure.

A good part of UPPCL revenue, in fact, goes towards debt servicing and salary bill.

Chief Minister Akhilesh Yadav had expressed grave concerns over mounting losses of UPPCL at a review meeting recently. He had directed officials to cut losses and to increase revenue.

UPPCL chairman and managing director Avnish Awasthi had said the company would cut losses by Rs 4,300 crore this year by higher revenue generation, checking power pilferage, deftness in purchase of power and judicious management of power demand.

The state chief secretary has been mandated to review the power sector threadbare and present a copious proposal to improve the state of affairs.

UPPCL has also to gear up for free electricity to farmers and weavers as promised in the ruling Samajwadi Party manifesto during UP poll 2012. This alone could cost the exchequer Rs 1,000 crore per annum.

Meanwhile, Yadav directed the Corporation for early implementation of the Rs 1,500 crore feeder separation scheme for cheaper power in the rural areas. He ordered for increasing the plant load factor (PLF) of power generation units and faster completion of Parricha, Harduaganj and Anpara D projects.

The dysfunctional small hydro power units would be re-energised and the private sector would be wooed for partnerships. The state government has also increased the budgetary support for the additional sources of energy department from Rs 35 crore to Rs 60 crore.