The Telegraph
Since 1st March, 1999
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Danger signal for Bengal power board

Calcutta, June 21: The West Bengal State Electricity Board’s mounting loss has eaten up 87 per cent of its net worth, according to a study conducted by international consultant KPMG.

KPMG was commissioned by Japan Bank of International Co-operation (JBIC) to work out a time-bound action plan for WBSEB. JBIC provides funds to WBSEB for renovation and expansion of its distribution and transmission.

KPMG has identified three major areas of concern — lack of commercial orientation, high aggregate technical loss and a mounting loss which has already eroded the board’s net worth. WBSEB is saddled with a loss of Rs 800 crore.

“This study is very crucial for us,” said a senior WBSEB official.

Commenting on the business environment of the board, KPMG said the aggregate technical loss (ATC) was brought down to 36 per cent in November 2002 but the loss is still quite high. There is an imperative need and scope for considerable reduction of the loss, it added.

WBSEB suffers a loss of around Re 1 per unit on each unit of power purchased/generated and sold.

Although the average realisation has increased by 63 paise/unit, the corresponding cost of supply has increased by 68 paise per unit leading to further widening of the gap by 5 paise per unit.

KPMG said that the rate of return of the board has been negative and compares poorly with the prescribed statutory return of 3 per cent.

The consultant has also observed that ageing workforce is another major concern. “Training is not viewed seriously by the employees and there they lack interest in training programmes,” it added.

KPMG conducted extensive interviews at various levels and visited different circles, divisions, sub-divisions and supply stations before it came to such a conclusion.

The consultant has also suggested some remedies for WBSEB’s woes. First, the board should try and meet its revenue targets through 100 per cent metering, billing and collection and take prompt action against erring consumers. Second, the board has also been asked to ensure actual meter reading and report any case of meter tampering.

At the corporate level, the consultant has suggested that WBSEB should take up a supportive role rather than the policing role to the field offices. The officers at the corporate level should monitor performance of distribution centres through regular energy audit.

For employees, KPMG has suggested a scheme that would recognise and reward performance through a carrot-and-stick mechanism.

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