Discoms of Rajasthan and Punjab have missed their loss-reduction targets under Ujwal Discom Assurance Yojana (UDAY) by wide margins, recent data reveals. On the other hand, Haryana and Bihar have managed to reduce their discoms’ cost-revenue gap or losses more than committed by them under the tripartite UDAY MoU.
Also, all five states — with the most debt-burdened discoms — were running behind schedule as on September 30, 2016, in curbing the aggregate technical and commercial (AT&T) losses or pilferage and theft of electricity (see table).
A glance at the performance of the five key states that signed on for UDAY reveals a mixed picture. A total of 18 states had decided to participate in UDAY, a scheme to facilitate the financial turnaround and revival of power distribution companies (discoms). The scheme was launched in November last year and the states have committed to reduce their AT&C losses to 15% and eliminate the cost-revenue gap by the end of FY19.
Power ministry officials dealing with UDAY told FE that the cost-revenue gap for many states would narrow at the end of the fiscal as many outstanding bills are cleared in third and fourth quarters. The official added that the quarterly disclosure of data was a good tool to keep the discoms on toes but a performance evaluation based on the same would be premature.
The emphasis on furnishing timely data seems to have had no impact on Uttar Pradesh. On the Union power ministry’s official UDAY portal, the numbers on cost-revenue gap regarding UP discoms have not yet been updated for the quarter ended September 30. Officials handling the portal told FE that only two out of five UP discoms have furnished the latest data despite several reminders. “We may remove the state’s data from the portal till the final numbers from all the discoms arrive, as incomplete data could show a misleading picture,” an official said.
As far as reduction of AT&C losses is concerned, none of the five states managed to achieve their targets, though Punjab, Haryana, and Rajasthan came closer to their targets.
Although the UDAY portal also gives the progress made by the states as per fourteen parameters including feeder metering for both rural and urban areas, smart metering, feeder segregation, access to electricity to unconnected households among others, the improvements in these areas reflect on the broader yardstick of cost-revenue gap and AT&C losses.
The Centre launched UDAY as discoms’ accumulated debt ballooned to Rs 4.5 lakh crore by September 2015. The debt has not only put the lenders to discoms at risk but also banks which gave loans to newly commissioned or under-construction projects.
States signing up for UDAY issued non-SLR bonds worth Rs 1 lakh crore in fiscal 2016 to take over 50% of discoms’ debt. An additional Rs 67,000 crore of UDAY bonds are expected to be issued in fiscal 2017 to take over another 25% of the debt. Discoms may issue state-guaranteed bonds for the remaining 25% of debt that will remain outstanding with them.