State hopes to reduce power AT&C loss by 12-13 per cent

The Orissa government aims to bring down its Aggregate Technical & Commercial (AT&C) loss by 12-13 per cent in the power distribution sector and thereby save Rs 800 crore in the next four years through the implementation of the Rs 2400-crore Capital Expenditure (Capex) programme for the four distribution utilities operating in the state.

The AT&C loss in the state currently stands at 39 per cent and for every one per cent reduction in loss, the state hopes to save Rs 65 crore.

The state government has also decided to put in place a three-tier monitoring system- one by the distribution companies (discoms), the second by Grid Corporation of Orissa, the bulk purchaser of power in the state and the third by an independent monitoring and evaluation agency.

The three-tier monitoring and evaluation system is expected to ensure the successful implementation of the Capex programme.

Speaking at the launch of the Capex programme, P K Jena, the state energy secretary said, “The capital expenditure of Rs 2400 crore will be made over the next four years and through this investment, we expect to bring down the AT&C loss by 12-13 per cent. Out of the total expenditure ofRs 2400 crore, the state government will provide Rs 1200 crore while the four discoms will mobilize the remaining Rs 1200 crore.”

Out of the state funding of Rs 1200 crore, Rs 500 crore would come from the 13th Finance Commission which is to be passed on to the discoms with 0 per cent interest.

There will be a matching state share of Rs 166.67 crore against the grant of the 13th Finance Commission as loan with 0 per cent interest. Besides, Rs 166.67 crore would be given as loan to Gridco for one-third counterpart funding to the grant of the 13th Finance Commission with four per cent interest.

The state government will also offer Rs 366.66 crore as budgetary support in the form of soft loan with four per cent interest.

Out of its financial assistance of Rs 1200 crore to the discoms, Rs 300 crore would be provided in 2010-11, Rs 400 crore in 2011-12 and Rs 250 crore each in 2012-13 and 2013-14. The discoms are required to pay back the entire loan of Rs 1200 crore including the grant of the 13th Finance Commission in 15 equal installments after a moratorium period of five years on both principal and interest.

Chief Minister Naveen Patnaik said, “In order to revive the distribution sector and make it viable to provide better consumer service in terms of improved quality of supply of power, reliability in supply and better consumer service, my government has approved the proposal for investment of Rs 2400 crore in the state distribution sector. The investment is aimed to develop commensurate technologically advanced distribution infrastructure to effect reliable and stable power supply in the state with minimum loss on the distribution system.”