West Bengal?s Marxists may be unintentionally leaving a precious gift for their arch-rival Mamata Banerjee if the Trinamool Congress gains power: A healthy power sector, thanks to reforms initiated as early as 1985 and stepped up in 2007.
Despite three missed deadlines, the state is reaping the benefits of splitting the West Bengal State Electricity Board (WBSEB). There are three power companies in the state now, carved out of the electricity board which together have generated a profit of over R300 crore for 2010-11. Consumers, of course, have little to cheer about as the state suffered massive power cuts last summer, thanks to the archaic power lines and little investment to revamp them, though transmission and distribution losses have come down significantly.
The revamp occurred in phases. The government separated electricity generation much earlier ? in 1985, putting it under West Bengal Power Development Corporation. In 2005-06, the state also corporatised transmission and distribution as West Bengal State Electricity Transmission Company and West Bengal State Electricity Distribution Company.
But the state did not privatise them and thanks to the reforms, the 30,000-odd employees at these two public sector companies are the only ones with stable salaries in a year when the government has struggled to pay other employees.
The public sector plan followed the road map laid out by PricewaterhouseCoopers. However, the unbundling came at a huge cost to the exchequer as the state waived R10,000 crore worth of liabilities to enable WBSEDCL and WBSETCL start with a clean slate.
All three companies started making profits from 2006-07, though there were ups and downs. For instance, WBPDCL?s profit slipped from R116.78 crore in 2008-2009 to R23.33 crore in 2009-2010). But unlike all other state-run sectors, power became the best-managed one in the context of the state?s poor governance standards.
?WBPDCL doesn?t have to take state support to pay salaries to its workers,? Krishna Gupta, WBPDCL managing director, said. ?Ditto WBSEDCL and WBSETCL, in terms of paying salaries to its employees,? he added.
West Bengal power secretary Malay Dey said WBSEDCL would report a profit of about R100 crore in 2010-2011, while WBSETCL?s profit would touch R200 crore. WBPDCL?s profit in 2010-2011, according to Gupta, would see a marked improvement from a level of R23 crore registered in 2009-2010.
In fact, the unbundling initiated by former power secretary Sunil Mitra (currently Union revenue secretary) has brought the state power sector out of the red and helped the state get the benefits of the accelerated power development and reforms programme.
Although West Bengal last summer had witnessed sharp power cuts, Dey assured this would not happen this summer since all the generating units with installed capacity of 4,170 mw were running steadily. The state’s total installed capacity is 8,100 mw ? including private sector CESC and central government-owned DPL and NTPC.
Last summer, West Bengal had a peak demand shortage between 500 mw and 700 mw, which is expected to go up between 800 mw and 1000 mw this summer with WBSEDCL’s consumer base rising from 85 lakh to 1.20 crore. But WBSEDCL would be in a better position to buy power this summer because the cost of traded power has come down from last year’s level.
?Even if some of the units fail at a peak demand situation of 5,000 mw, the state has entered into a power swap agreement with Tamil Nadu, Meghalaya and Delhi. It is also on strong footing in terms of power trading, enabling the state to get power during the peak hours,? a power department official said.
Spot prices of traded power are between R4.50 and R6 per unit at present against R10-12 during the same period last year. With the mercury rising, this price is expected not to exceed R7-8 per unit though for unscheduled drawal this might go up to R18 per unit, an official said.
But WBSEDCL has entered into long-term trading agreements and so, there is little chance of unscheduled drawal, which also puts pressure on the grid, Dey said.
Meanwhile, the Centre has pumped more than R250 crore into the state power sector, along with the R800 crore invested by the state in the last three years to augment transmission and distribution network. As a result, transmission and distribution losses are down to 22% from a level of above 47%, the power secretary said.
According to Gupta, WBPDCL would soon commission another 250 mw at Santhaldih and another 1,000 mw at Sagardighi by 2014. West Bengal government, he said, has equity in all the WBPDCL projects under construction estimated to cost around R6,000 crore.
So, if Trinamool Congress is voted to power, it will inherit at least one good thing ? the reformed power sector ? and Mamata Banerjee, widely perceived to be the next chief minister, would have at least one project made by the last government to inaugurate.