Centre to review discoms’ turnaround efforts

New Delhi: Last November, the central government floated an ambitious scheme to rescue debt-ridden power utilities in states. In a few days, we will know how well it has worked.

The government is set to review how power distribution companies bailed out through a debt restructuring in 2015-16 have cut power theft and improved bill collection efficiency, once the first set of data on their operational performance arrive by 30 June.

Monitoring performance is crucial: states which fail to turn around their power utilities despite the debt restructuring under the Ujwal Discom Assurance Yojana (UDAY) will have to show the firms’ losses as state debt in their budgets from 2018-19.

A power ministry official, who asked not to be identified, said distribution firms in Rajasthan and Uttar Pradesh have taken strict measures to improve performance. Cutting the salaries of engineers for failing to contain power theft and incentivizing reduction in power theft by providing uninterrupted power supply in areas where theft is reported to be low are among the steps taken, said the official.

Losses from power theft and inefficiency in bill collection, known as technical and commercial losses, are reported every quarter. In some states, such losses are as high as 35% of the total units supplied.

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