Shunglu panel on power discoms to submit report next month

The high-level Shunglu Committee, which is reviewing the financial health of power distribution companies, is likely to come out with its report next month.

Many power distribution companies (discoms) are in poor financial health, raising concerns about the possibility of high loan defaults.

The report of the high-level committee on financial position of distribution utilities is almost complete and is expected to be submitted, probably to the Planning Commission, in October, a committee member said.

The panel is chaired by former Comptroller and Auditor General VK Shunglu.

According to the official, the report would have the financial statements of distribution utilities updated till 2009-10.

The committee’s terms of reference include a review of the accounts of state electricity boards and power distribution companies (discoms). There are around 73 distribution utilities in the country.

Going by estimates, electricity distribution losses totalled a staggering Rs 70,000 crore in 2010-11 and is projected to rise further in the coming years.

The mismatch between power tariffs and the cost of generating electricity is cited as one of the key factors hurting the financial health of discoms.

Poor financial position of distribution utilities is a major concern for the fast-growing Indian power sector, which is expected to see a capacity addition of over 50,000 MW in the 11th Five-Year Plan (2007-12).

Source – Business Standard

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SUMIT KUMAR

Executive at India Electron Exchange

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