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Imperatives of privatisation of power distribution
Written By murali772 - 28 May, 2008
Bangalore Infrastructure BESCOM Power Privatization Citizen Reports
The World Customers' Day was observed by BESCOM in its usual ritualistic style on Saturday, the 15th March by holding a workshop on 'Customer Care', in association with Public Affairs Centre (PAC), Swabhimana, Consumer Advocacy, and Karnataka Electricity Regulatory Commission (KERC). Of the audience of a 100 odd people, only some 30 were members of Civil Society groups (RWA's, etc), the rest comprising mostly of BESCOM officials. Seeing this, the chief guest, Dr Samuel Paul, Chairman, PAC, remarked that the poor turn out was perhaps an indication of the high level of satisfaction with BESCOM services.
I wish to submit here that such statements by people of the stature of Dr Paul tend to convey a totally wrong picture compared to the actual position obtaining on the ground. Granted that the services may have improved compared to what it was a few years ago. But, Bangalore today produces goods and provides services of the highest quality to its clientele right across the globe. For such a city, the interruption-ridden service of BESCOM is nowhere near good enough. And, it is not as if better level of service is not possible in the Indian context, or anything like that. Cities such as Mumbai, Ahmedabad, Surat, Kolkata, Greater Noida, enjoy far better quality of power supply. This is evidenced by the fact that, while Bangalore is currently a Rs 1500 cr market for gensets, inverters, converters, batteries, emergency lamps, candles, match-sticks, and what have you, these products have a marginal presence, if at all, in the cities listed. And, now, New Delhi is all set to join them. The reason for the same is also not too far to seek - while Bangalore is served by the government-owned BESCOM, all the other cities are served by companies in the private sector. Need one elaborate further?
The apologists would immediately go on to talk about BESCOM's social responsibility of having to cater to the needs of the rural sector. But, then is it doing any better than its counterparts in the other states in this aspect? The records do not show anything like that, either. In effect, whereas in Karnataka, the people in both the cities as well as in the rural areas have to suffer the incapacity of the government agency, people in cities like Mumbai get the benefit of quality power supplied by private sector companies even as their rural brethren may not be in such a privileged position. Perhaps that is the idea of social justice of Karnataka politicos! But, in today's competitive world, can a city afford this?
Ironically, however, in Karnataka itself, there has existed from long an excellent model for sustainable rural power distribution in the form of the Hukeri Co-op Society in Belgaum district. The Society buys power in bulk at high voltage from the Karnataka Power Transmission Corporation (KPTCL), arranges its distribution, collects money, and remits it to KPTCL on time, thus ensuring quality power supply from them, and, in the process, keeping everyone including the many farmer members totally happy. Where this model may not be feasible, particularly in geographically isolated communities, stand alone solar systems are a far more sensible option, than running kilometers of transmission lines. Very clearly, therefore, the rural sector load has been pooled in by BESCOM only to provide a convenient scapegoat to mask its poor planning and management.
Coming back to the workshop - now, if people do not turn up in sufficient numbers at such meetings, it is not because they are satisfied with the services, it is plainly because of the futility of complaining to a government agency. Those who can afford have made alternate arrangements, and those that can't are any way voiceless. One would have thought organizations like PAC, Swabhimana, Consumer Advocacy, and even the KERC would bother to speak up for the voiceless.
PS: The above is the text of a posting titled 'customer-care-less' made on 20th March, '08 on my blog http://karnataka-power-muddle.blogspot.com/. Since it brings out all aspects of the matter, I chose to retain it as it is.
Related reading: http://bangalore.praja.in/bangalore/blog/murali772/2008/05/22/precarious-supply-side-scenario
Muralidhar Rao
COMMENTS
murali772 - 12 November, 2008 - 08:15
The problem is mainly related to transmission and distribution and if it is not streamlined in Bangalore, where there is 80 per cent recovery, the entire system will collapse, he cautioned.
For the full text, click on:
http://www.expressbuzz.com/edition/story.aspx?Title=Moily+blames+govt+for+worsening+crisis&artid=PlQh8g4FSL0=&SectionID=7GUA38txp3s=&MainSectionID=fyV9T2jIa4A=&SectionName=zkvyRoWGpmWSxZV2TGM5XQ==&SEO=
Muralidhar Rao
Public sector vs Private sector - impact on consumer
murali772 - 19 December, 2008 - 11:06
Additional burden a consumer has to bear when the distribution is with a government agency (like BESCOM in Bangalore), as compared to when it is with a private agency (like Reliance in Mumbai):
1) Speed money at the time of installation.
2) Careless installation practices, leading to repeat breakdowns, and costs thereof for repairs (apart from opportunity costs over time and effort involved in restoration)
3) Poor quality of transformers and other equipment, leading to repeat failures due to overload, and costs thereof.
4) Poor quality of supply, leading to the need for investment in and operation of stand-by power equipment.
5) Energy theft, in connivance with meter readers and engineers, camouflaged as T&D losses, necessitating frequent tariff increases, or financial instability of the service provider.
When privatisation happens, many mafias will go out of business, and the consumer is generally rid of most of the above problems. But, mafias' loss can become lobbyists' gain. This happens if the terms of engagement of the private agencies get 'fixed' to the detriment of the consumer, like it happened in the case of the notorious ENRON, and is happening even today, like in the case of Rs 1 lakh crore '3G spectrum allocation' scam centred around the DMK minister, Raja
(http://epaper.expressbuzz.com/NE/NE/2008/12/17/ArticleHtmls/17_12_2008_010_001.shtml?Mode=1).
The answer to that is transparency, the mother of all requirements. But, this is required even when entrusting a job to the public sector agency. The problem with government agencies is that, sooner or later, the mafias will take over. So, why not engage private agencies in a transparent manner and get rid of all the problems, once for all?
Muralidhar Rao
Nobody wants to invest in this huge opportunity
murali772 - 30 January, 2009 - 12:14
NO MoU IMPLEMENTED: In 1990, the Central Government made drastic changes in its electricity policy and opened up power generation for the public entrepreneurs. Karnataka Government too had, since then, signed many memorandums of understanding. But, interestingly, none of them have been implemented.
From July 28, 1992 (in Boston, USA) to August 3, 1992 the then chief minister S Bangarappa signed 11 MoUs with different agencies to generate totally 5010 MW power. None of them have come up so far.
In 2001 during S MKrishna’s tenure a MoU was signed to generate 300 MW. Later H D Kumaraswamy, as chief minister and the energy minister signed a MoU to have a total power generation of 1040 MW. Both have not been implemented so far.
PRIVATE SECTOR In the same period from 1992, however, many private companies had installed their own power generation units. Total power generation from these four stations is 588.83 MW.
For the full report, click on:
The reason is clear as daylight, but for those who want to see. Why would anybody want to invest huge monies and forever remain at the mercy of the monopoly government customer, namely KPTCL, who can pay you only in 11 months?
Muralidhar Rao
UP franchising out power distribution
murali772 - 22 February, 2009 - 17:35
Power distribution in UP cities to be franchised out - check:
Perhaps the model for Karnataka also. It's quite a miracle that the existing arrangement hasn't collapsed yet. But, it can happen any time!
Muralidhar Rao
murali772 - 12 November, 2008 - 08:11
Many industrialists blamed the government for the problems being faced by them. “The BESCOM and the KPTCL officials are quite capable of managing the situation. But due to the excessive intervention of the government, they are unable to deliver the goods,” an industrialist opined. Citing an example of government mismanagement, an industrialist, under the conditions of anonymity, said that the state had lost more than 180 MW of co-generation capacity as some of them have not been paid off for more than two years.
For the full story, click on:
http://www.expressbuzz.com/edition/story.aspx?Title=State+govt+making+industries+%E2%80%98powerless%E2%80%99&artid=0zjSN2W4Xxo=&SectionID=7GUA38txp3s=&MainSectionID=fyV9T2jIa4A=&SectionName=zkvyRoWGpmWSxZV2TGM5XQ==&SEO=
And, interference by politicians is inevitable in the public sector. And, that's why these services have to be privatised as has already been decided by past governments, but prevented by various vested interests.
Muralidhar Rao
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