An extensive wait for securing an electricity connection has been a major irritant for consumers, both domestic and commercial, and the delays have only intensified in recent years as power deficit continues to increase, especially in important states with large commercial activities. So, it comes as a surprise to know that this malaise is not an exclusively Indian phenomenon and that large parts of the developing world suffer from this problem in varying degrees.
This is highlighted in a recent report titled ?Getting Electricity? published by the World Bank as a pilot indicator to assess the problems in securing power across 140 economies. The report, which uses data collected as a part of the most recent ?Doing Business? report from June 2008 to June 2009, however, restricts its scope to efficiency and the cost of services provided to commercial consumers by distribution utilities.
Earlier studies made by the World Bank had focused on the reliability of power supplies in developing countries and noted that a typical firm in a low-income country suffers as many as 18 days of outage in a month while the number comes down to eight in lower middle income countries and just three in upper middle income countries. And mangers who responded to these World Bank Enterprise Surveys have estimated the losses from outages to average 3.2% of annual sales. So, the focus of the new pilot survey was on the complexity of procedures and the time and costs borne by potential power consumers in securing a reliable electricity connection in the main business city of each country.
According to the new study, the number of procedures for getting an electricity connection varies from three to ten with countries like Denmark, Germany, Japan and Mauritius belonging to the former category while those like Bosnia & Herzegovina lagging in the latter. And when it comes to the pace of securing connections, which varied between two-three weeks and a high 442 days, the best performing countries were Germany, St Kitts and Iceland, and the worst were Afghanistan, Guinea-Bissau and Sierra Leone.
The procedures are made more complicated in some countries such as Bangladesh and Tanzania where consumers are also asked to provide materials like poles, meter boxes or even transformers. However, regulators in some other countries have tried to impose time limits for providing connections. In fact, the study notes that 37 countries including India, Angola, Bolivia and the US have imposed legal time limits for providing power. But not all these countries invoke penalties for the delay. For instance, in Mumbai, the Maharashtra Electricity Regulatory Commission levies a fine of Rs 100 for every week of delay after the legal limit of 30 days, the actual time recorded for providing power is 52 days. However, in Angola, power utilities ensure connections in 14 days even though the legal limit is 40 days.
But what is most disappointing is the sharp diversity in the cost of securing power connections, including security deposits. At the lower end is Japan, where the cost is zero, and Hong Kong, where the cost is 2% of the per capita income of the country. But it moves up to an exorbitant 28,304% of the per capita income in Congo and a high 43,020% in Burundi. And having a security deposit is no solution to non-payment of bills as in the case of India where the bills collected are only 71% despite a security deposit charge.
The study shows that in the case of procedures, time and cost, India fares somewhere in the median range with each connection demanding seven procedures, 67 days and 505% of the average per capita income on an average. In contrast, it took only five procedures, 48 days and 17% of the per capita income in the US. The burdens were lower in Germany, where it took three procedures, 17 days and 5% of the per capita income to secure a commercial electricity connection.
A comparison with the Bric countries show that India?s record on providing connections is not as bad as is often believed. For instance, the numbers show that though the number of procedures was lower at five in China, it took 118 days to secure a commercial connection and the costs were at a stupendously high 836% of the national per capita income, both much higher than in India.
The scenario was worse in the case of Russia, where it took eight procedures, 272 days and 4,522% of the average per capita income to secure a connection. The only Bric country which fared better than India was Brazil where it only took six procedures, 36 days and 163% of the per capita income to gain the power links.
A comparison with India?s neighbours also puts the country?s position on better standing. Though Pakistan and Sri Lanka had a fewer number of procedures than India, the time taken for providing power connections were substantially larger than that of India and so were the costs which was more than three to four times higher. In Pakistan?s case, though the number of procedures was the same as that of India, the days taken for securing connections and the costs were also three to four times that of India.
A major conclusion drawn from the study is that though electricity reforms in most developing countries have helped improve the efficiency of power utilities, the consumers are still to benefit in crucial areas like basic access to connections. The lack of prompt access to the utility in scenarios where most suppliers retain monopolistic positions is especially disturbing as the biggest losers are usually the small producers who have little option to secure power from alternate sources.
