UP power distributor eyes turnaround

Uttar Pradesh Power Corporation Ltd (UPPCL), the state government-owned electricity transmission and distribution utility, is trying to effect a financial turnaround after posting losses for the last four years.

UPPCL's cash deficit was down from Rs 1,350 crore in 2000-01 to Rs 950 crore in 2001-02 and further to Rs 450 crore in 2002-03. According to estimates, it will be about Rs 500 crore in the current financial year.

This estimate may go up as UPPCL, which is divided into four distribution companies, may also have to supply more power to two regional independent companies "" the Noida Power Company, which distributes power in Greater Noida, and the Kanpur Electricity Supply Company (Kesco), the power distributor for Kanpur.

Also, UPCCL will have to supply power to rural areas for 14 hours a day. "Earlier, we were planning to close the year with a deficit of about Rs 800 crore. But, now another Rs 400-500 crore will be spent on supplying an additional six hours of power to rural areas, from where there are little returns. The monthly rate on a tubewell is fixed at Rs 60, whatever may be the quantum of power used. Thus, the owners of tubewells not only use power for their own needs, they also sell it to others," SK Agarwal, director (finance), UPPCL, told Business Standard.

Agarwal said the company was trying to keep the deficit down to Rs 1,100 crore.

The figure could have been much higher, but some measures were taken to keep it from going up. A one-time settlement of dues of Rs 1,000 crore is being done and is likely to yield Rs 300-400 crore in this financial year. UPPCL will get a subsidy of Rs 950 crore and a bonus of Rs 150 crore. These will help reduce the cash deficit.

Agarwal said the four distribution companies had started working. He praised the Meerut division for improved performance. Kesco too had started showing signs of a recovery, he added.

The Meerut division has shown good progress. In January this year, revenue collection was Rs 116.03 crore as against Rs 112.54 crore in the corresponding period last year. For the financial year till January, the figures stood at Rs 1442.14 crore, an improvement of Rs 178.05 crore over the previous corresponding period.

In the same period, revenue collection by the Lucknow division has gone up to Rs 718.48 crore from Rs 671.80 crore in the previous year. For the Agra division, the increase is from Rs 736.30 crore to Rs 749.09 crore in this financial year and for the Varanasi division revenue collections have gone up from Rs 715.81 crore last year to Rs 752.50 crore this year.

On the whole, Rs 3,662.21 crore has been collected, up from Rs 3,388 crore in the corresponding period last year.

Kesco's downward trend was stemmed from October 2003. In the next three months, the through rate has gone up to Rs 1.87 a unit from the corresponding period last year when it was only Rs 1.61 a unit.

For this quarter, the improvement has been 23.23 per cent. Thus, the downslide has been arrested for the time being. Agarwal is confident that things will improve from now on.