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Friday, February 28, 2014
Suggestions on Draft Power Regulatory Accounts
The Secretary, DERC,
Viniyamak Bhawan,’C Block'
Shivalik, Malvya Nagar,
New Delhi-110024.
Madam,
Subject: STOP DERC (Power Regulatory Accounting) Regulations 2014.
Ref: Public Notice dated NIL, Ref. NIL issued by Secretary on draft Regulations.
DERC has miserably failed to safeguard the interests of Consumers,be that in Tariff fixation, ensuring Performance Standards or in representing the Consumers in Courts and Tribunals. DERC’s Credibility is at stake because of Public having Political Appointees as members who have allowed DISCOMS and the Ruling Elite to Dictate terms in Detriment to Consumer Interest.
Having admitted in the High Court that DERC lacks the Competence and Infrastructure to Audit DISCOM accounts, we fail to understand why has DERC suddenly woken up to the need of Power Regulatory Accounting Regulation 2014 at an enormous cost to the Consumers and Exchequer, not to mention accommodating more favorites in cozy Post Retirement Berths.
Unfortunately while putting the Draft Regulations for comments by general public at large, DERC has not stated what is the objective of introduction of these Regulations and under which Regulation it has been authorised to introduce such Regulations. Unfortunately DERC has all along violated the provisions of Electricity Act, 2003, National Electricity Policy, 2005 and National Tariff Policy 2006.
It is our apprehension that the DERC shall conveniently use the Regulatory Accounts for fixing Tariffs and wash off its hands. The Commission is yet to respond on our queries and suggestions forwarded on 31-01-2014, wherein we had highlighted that the DISCOMS have furnished different Financial DATA at the time of submitting ARR and the Balance Sheet that was filed with the Registrar of Companies. Therefore, our apprehension is based on the past conduct of the DERC.
We have seen how the Meter Testing IS Codes were framed so that the Cheating due to Fast Running Meters cannot be detected while framing procedures that did not account for RESIDUAL BACK FLOW, explains the Trust Deficit amongst the Consumers.
The existing independent bodies like CAG and others are performing their job and have public faith, therefore I register my protest with the following observations ……
1. It is a matter of surprise to note that the Delhi Govt. issued a notice for CAG audit on the accounts of Private Distribution Company on 07-01-2014 & various forces has been acting against the audit of CAG. One of the actions towards it may be the making of DERC (Power Regulatory Accounting) Regulations 2014. The time of making the Regulations make the suspicion in the minds of stake holders as these Regulations will provide hurdles in CAG Audit to the private DISCOMs. The Regulations will enable the DISCOMs to do away with the Government Audit like CAG, as the CAG will not abide by the terms of references made by the DERC. However when the terms of references by way of the regulations will be made, the audit is to be carried out as per the Regulations only.
2. There are several Indian and International Laws, procedures & principles under which the accounting procedures are guided. Therefore the accounts of the firms or corporations are guided by those principals & laws. Therefore a separate set of accounting procedure Regulations were not necessary on the interest of accounting procedure.
3. The draft regulations have certain shortcomings, such as verification of physical assets for capitalization of asset. Physical verification of capital asset is very important in the capital based tariff. Making “Power Accounting Regulations” shall provide DISCOMs & other companies for coverage of such manipulations under the various provisions of proposed “Power Regulatory Accounts” Regulations. Therefore the draft regulations in the present form is to be repealed.
4. In regard to the capitalization & physical verification of asset, DERC during prudence check for the year 2002-03 to 2006-07, it was found that the private DISCOMs of BSES Rajdhani Power Ltd. (BRPL) & BSES Yamuna Power Ltd (BYPL) both purchase capital goods from their sister concerns M/s REL, more than 68.5% above the market rate and capitalized through the audited accounts. The replies filed by BRPL & BYPL were found by the Commission far from satisfactory. However DERC undertook action of their own & found that BRPL & BYPL could not provide satisfactory answers for escalated capital infusion. The Commission by its own wisdom and prudence check found out that the prices were shown to be escalated which were shown in the Audited financial accounts. Had there been the DERC (Power regulatory Accounting) in this present draft form, the Commission could not be able to go about as they did on this occasion.
5. There are several orders from the Higher Courts, where it opines that statutory Regulations formed by the Appropriate Authority (in this case DERC) is not a executive instruction but it is always by legislature & it desires sanction from legislative power vested in the legislature. DERC a statutory authority frame Regulations & issue notifications could not refuse to follow the Regulations in its application in any given situations. A statutory rule or Regulation or Notification shall be treated for all purposes of construction of objection exactly as if they are the Act & are to be of the same effects as if contained in the Act. Therefore once these Regulations are made for Power regulatory Accounting will supersede all the other accounting rules and procedure as followed in accounting procedure.
6. Tariff regulations are made U/S 61 of the EA 2003. The Principles of Tariff Regulations for determination of Tariff is based on encourage competition, efficiency, and economical usage of resources, good performance and optimum investments. In a private monopoly market environment of distribution of electricity in Delhi where the prices are not determined under competition, the proposed draft “Power Regulatory Accounting” is against the consumer interest as the said draft not in consonance with the existing Tariff Regulations of DERC and defeat the purpose of Tariff determined principles as envisages by the law.
7. Tariff is determined U/S 62 and 64 of the E/A 2003. The truing up of the accounts of the DISCOMs of past period by the Commission with prudence check is another important aspect for determination of tariff with participation of all the stake holders. It is apprehended that by way of making this ‘Power Regulatory Accounting’ all the illegal and manipulated accounts can be legalized by making law to accept the annual audited accounts of DISCOMs. This will defeat the main objective of transparency which is the prime goal of Power Sector Reform.
8. From the earlier experiences and the way the private DISCOMs manipulated their Annual Financial audited accounts, it is apprehended that the proposed draft “Power, Accounting Regulation” shall further provide the approval of the commission for manipulation of their accounts which they have been doing for all the years. The draft Regulations proposes all materials on records and the formats of Tariff are to be submitted as per their annual financial audited statement and therefore there would be very little scope for further prudence check of the formats of the DISCOM to be submitted as per the proposed Regulation. Therefore the proposed draft Regulation would take away the power of prudence check during true up process by the commission.
9. The private DISCOMs has been undergoing CAG audit. CAG while doing their audit is governed and guided by their own laws, rules, and Regulations, independent to any other agencies. The proposed “power Regulatory Accounting” will be another hurdle to carry out CAG audit in the private DISCOMs. CAG carry out their audit according to their own terms of references independent to any other terms, rules, Regulations of any Organizations. Considering the importance and necessity of CAG audit in Private DISCOMs the proposed draft “Power Accounting Regulations” proposed by Hon’ble Commission is to be called back.
10. After repeated demand and prayer by the consumers of Delhi before the Commission the Govt. of Delhi recently agreed an ordered recently for CAG audit for the accounts of the Private DISCOMs and currently the CAG audit is under progress. However private DISCOMs went to the higher courts i.e., High Court of Delhi and the Apex Court to get rid of the CAG audit fearing all their manipulations in their audited accounts will be caught. The private DISCOMs applied for stay order in the CAG audit in different courts. The proposed “Power Accounting Regulations” of DERC will strengthen the hands of Private DISCOMs to avoid CAG audit. The Private DISCOMs who has been very much expert in manipulation of financial accounts will get another opportunity and weapon by way of these Draft Regulations for pleading before the Higher Courts to get relief of the CAG audit. Therefore for the interest of the consumers and the public as a whole the proposed Draft Regulation may be called back by the Hon’ble Commission.
11. It is also surprised to note that these Accounting Regulations” has been proposed by Hon’ble Commission just after the CAG audit was ordered by the Delhi Government into the accounts of Private DISCOMs. The capital based Tariff of the DISCOMs, the physical verification of asset and truing up of capital expenditures is the most important criteria which could not be performed by the Hon’ble Commission since the privatization of erstwhile DVB the reason best known to the Hon’ble Commission. Under the above circumstances the proposed regulations will regularize all illegal and manipulations made into the accounts of Private DISCOMs since 2002-03 onwards. Therefore this is apprehended that certain forces are acting in favour of the DISCOM to derail the process of CAG audit currently undergoing in the private DISCOMs.
12. It is prayed before the Hon’ble Commission that the proposed draft Regulation may be called back for the interest of making the proposed Regulations more effective after getting the necessary input and observation of the CAG audit currently undergoing into the audit of Private DISCOMs. The input provided by CAG for strengthening the accounting system and prudence check of the Private DISCOMs may also be taken care of by incorporating those inputs in the present draft Regulations. This will be for the best interest of the consumers and also to the power sector reform as a whole.
13. Under the above circumstances it is suggested that the Commission to call back the proposed DERC (Power Regulatory Accounting) Regulation 2014 in the interest of the Electricity Consumers of Delhi.
This is without prejudice to any other submission that may be submitted at a later date.
Rajiv Kakria
Thursday, February 27, 2014
Govt spends Rs 3.65 to deliver Rs 1-worth food; 57% of subsidized food doesn't reach beneficiaries
NEW DELHI: The government spends Rs 3.65 to deliver Re 1 of food while 57% of subsidized food grains do not reach the intended beneficiaries. These startling findings by the Independent Evaluation Office point to massive corruption and pilferages in the existing public distribution system.
The agency's initial findings reveals that close to 36% of food grains are siphoned off in the supply chain, raising a serious question mark over effective implementation of UPA government's "game-changer" food security scheme which heavily depend on existing PDS network.
The agency has also found that corruption is less in the states such as Tamil Nadu where the PDS has been made universal.
The first task of the government's newly constituted independent evaluator was to study the effectiveness of the public distribution system (PDS).
The agency's first director general Ajay Chhibber said, "India can be a great economic power but must fix its Achilles Heel—which is better delivery of quality public services."
During his job as evaluator so far, Chhibber had told TOI that he has found that bureaucracy is a big problem with lack of coordination between ministries.
The former UN official claimed India could bounce back at 6.5% economic growth if bureaucratic bottlenecks are removed, adding that "administrative reasons" account for 1.5 percentage point dip in country's growth trajectory.
He argued that ineffective spending on government big-ticket social sector schemes had its bad impact on the economy.
Chhibber found that the incentive structure of social sector schemes, including PDS, needs to be looked at as it is ill-thought-out.
He has said in the existing PDS, it has been seen that as the ration shop owners fail to make enough money by selling grains to beneficiaries they are tempted to sell outside.
Apart from PDS, the agency is looking at the whole issue of movement of grain from the purchase centre to the consumer. "Eventually, we will also look at the Food Corporation of India and its operations, as well as the open-ended grain procurement policy," he said.
The independent evaluator would also focus on outcomes to ensure government schemes become more effective and accountable. Today, the government schemes are more target-oriented and not outcome oriented, Chhibber said.
The role of the agency assumes significance as the UPA government had budgeted around Rs 2 lakh crore on its flagship programmes in 2013-14.
The evaluator will submit its final report on the public distribution system and maternal mortality in the next 3-4 months, Chhibber said after the formal launch of the IEO.
The agency has also been asked to work on evaluating rural health outcomes and an insurance scheme handled by ministry of labour.
with thanks : TIMES OF INDIA : LINK
Wednesday, February 19, 2014
Delhi high court to hear discoms before RWAs, NGOs
NEW DELHI: The Delhi high court on Tuesday said it would first decide the plea seeking an audit of accounts of Delhi's three private discoms by the Comptroller and Auditor General of India before dealing with other matters on the subject. It was hearing a PIL filed by NGO United RWAs Joint Action (URJA) seeking a CBI or independent probe into alleged irregularities committed by them as well as a CAG audit of their accounts.
The PIL has said the then state government had given into pressure from the companies which sought a hike in tariff by faking losses and failed to fix the tariff for 2010-11. "We will go by the order dated August 24, 2011, and will deal with that limited issue (of CAG audit) first," a bench of justices Pradeep Nandrajog and Jayant Nath said and fixed the matter for hearing on March 20.
The high court had, on August 24, 2011, said, "...the issue that requires to be dwelt upon and addressed is the jurisdiction of CAG in respect of the said companies. It is further canvassed by them the same has to be tested on the anvil of the Constitution of India and the CAG Act, 1971. That apart, it is urged by them (discoms) once there has been a privatization of the electricity companies, they are not covered by the aforesaid Act. Issue notice on the question of admission. Regard being had to the limited lis (litigation) that has emerged before us, we would like the respondents (discoms and others) to file their respective counter affidavits only in this regard...," the bench said.
During the hearing, Prashant Bhushan, appearing for the NGO, said, "This a very important public issue and this needs to be settled." "Of course, we will settle it for you," the bench said and enquired about the status of the appeals filed by discoms against a single-judge bench order refusing to stay the Aam Aadmi Party-led government's decision asking CAG to audit their accounts. The appeals were listed before another bench, Bhushan said.
Three private discoms had filed appeals before a larger bench of the high court against a single judge bench order that had refused to stay the government's decision on CAG audit. The single judge bench had on January 24 not only refused to stall the CAG audit of discoms but also asked them to cooperate with the top auditor by furnishing the details sought.
with thanks : Times of India : LINK
Tata Power threatens tariff hike
NEW DELHI: With a hike in gas price looming over their heads, Delhi's power distribution companies are a worried lot.
While the BSES companies are yet to chalk out a plan on how to control their costs, Tata PowerDelhi has asked Delhi government and Centre to consider re-allocation of power from gas-based power stations for them. The discom said that if re-allocation of power from gas-based power stations was not done, it would lead to an increase in cost of power purchase and, consequently, tariff.
Delhi gets power from three central sector power stations—Dadri gas, Auraiya and Anta—and three plants owned by the Delhi government—Pragati power station, Bawana and gas turbine power station. The city gets approximately 1,255 MW power from gas-based power stations.
"The cost of power procured from these power stations is about Rs 3.49/unit to Rs 4.15/unit which when compared to the cost of power from other plants is on the higher side. When gas prices are increased from April, cost of power produced from these plants will rise by about 66% over the present cost—Rs 5.34/unit to Rs 6.20/unit," said an official.
According to Tata Power Delhi, it has made adequate arrangements for meeting the 2014 summer demand at much lower rates. It's also assured of meeting any contingencies at a price which, it says, would be much lower than the estimated price from gas station produced plants. Tata Power Delhi gets 237MW from gas-based power stations.
"It is requested that power produced from these plants be reallocated to needy states for 2014-15 by the ministry of power. If reallocation of power from gas stations is not done it would result in an increase in tariff. During off peak/night hours when the demand is low, these stations are run at minimum capacity or not run at all thereby resulting in discoms paying up fixed costs for these plants," said a Tata Power official.
The BSES discoms, Rajdhani and Yamuna, are trying to work out a formula on how to bring down costs but have not sent any official communication to the government yet. "Concerns are there, especially as we have long term PPAs with gas based power plants. We are looking at our options and working out a solution," said an official.
The issue of increase in gas price from April 1 was raised by former Delhi chief minister Arvind Kejriwal recently. Kejriwal alleged that the price hike was a result of collusion between some union ministers and Reliance Industries and said that RIL did not produce adequate gas from its eastern offshore KG basin in order to put pressure on the government to hike the price. The central government should give KG-D6 wells to ONGC, he said.
with thanks : Times of India : LINK
Tuesday, February 18, 2014
Atmospheric pollution in Delhi !
Not only loss of man hours but a great environmental dangerous atmospheric pollution occurs if a traffic signal is mismanaged or managed half heartedly.Sir there is no logic for the signal to become red if a large number of vehicle have yet to cross.Automatic signals are useful when there is not much rush.In time of rush it should be managed manually & judiously by the traffic personnel.If there is rush on one side he should turn the signal red only when all vehicles have crossed whether it may take 2 minnutes or ten minutes because when vehicles start moving,many vehicles can cross the signal in less time due to the increase in speed gained over more time.According to me it is illogical to stop the vehicles who have gained sufficient speed or are coming at high speed just to allow the vehicles in other direction to cross.While waiting ,not much energy & fuel is lost then while driving at slow speed .When all vehicles have crossed on one side ,the vehicles waiting for other side may be allowed to cross till such time that all have crossed & so on till the rush on each side reduces to a reasonable number.
No norms have been fixed by traffic head quarter for maximum duration of any signal.It has to be manipulated for maximum benefit to the public.I f any one has any question he may ask the control room of traffic help line at number 25844444 .One can also obtain the telephone number of the incharge traffic of the particular area.
I t is our duty for our own benefit to see that each traffic signal is being managed meticulously to reduce the rush at signals.It should be seen that almost all vehicles waiting at a side are able to cross easily & completely when signal turns green.This will prevent undue tension in minds of drivers who are tense to cross the signal before it becomes red & try to overtake & speed up making them vulnerable for accidents.
With best wishes for a tension & pollution free delhi
Dr VK AGGARWAL
increase the average speed of traffic on ring road from Maharani bagh to Dhaula quan.
The Commissioner, Delhi traffic police
Sub: Suggestion to increase the average speed of traffic on ring road from Maharani bagh to Dhaula quan.
Sir, There are number of flyover on this stretch of ring road.The dtc buses stops on bus stops before the start of fly over & then climb the flyover to cross the intersection & again stops on the next bus stop ahead of the fly over.In the process there is clash of vehicles obstructing the smooth flow of traffic leading to slow movement of vehicles.This can be avoided if the buses are asked to keep to left ,not to use the fly overs,use the traffic signal instead of flyovers to cross the road.By this ,the other vehicles which do not have to stop again & again will be able to move faster.When the average speed of all the vehicles is increased it will increase the speed of buses also & will compensate the time lost on the red lights.
With regards, Dr VK Agarwal
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