700 Lt Free Water : NBT Delhi

CAG all set to audit three discoms

NEW DELHI: The Comptroller and Auditor General (CAG) is ready to start audits of three joint venture power distribution companies (discoms), supplying power in the national Capital, with top officials in the federal auditor's office citing examples of similar exercises of private firms and public private partnership (PPP) ventures in the past.

Delhi has three discoms - BSES Rajdhani Power Limited (BRPL); BSES Yamuna Power Limited (BYPL) and North Delhi Power Limited (NDPL) - and in each the state government holds 49% share and the rest with private firms (51%).

A top CAG official expressed hope that with the Arvind Kejriwal regime willing to ask the federal auditor to examine the books of these companies, the state government may be able to convince the Delhi High Court to permit scrutiny of their accounts on the grounds that similar audits of private companies such as Reliance Industry Ltd's KG D-6 basin had been done in the recent past while another one is in progress. Besides RIL and other oil and gas companies, the CAG had audited several PPP projects in highways and infrastructure sector, including the Delhi airport.

Sources said one of the two private companies having majority share in discoms in Delhi have stopped paying the National Capital Territory (NCT) government share in the revenue it has been collecting. The arrears, on account of the government's share in the revenue with one such private company, have mounted to Rs 1,200 crore.

Audit is likely to reveal other discrepancies like total cash collection and how much it has been shown in the account books of these firms; billing cycle and if customers have been charged as per the actual tariff slabs applicable on monthly basis.

Aam Aadmi Party (AAP) chief and CM-designate Arvind Kejriwal had earlier claimed that then Delhi Electricity Regulatory Commission (DERC) chairman Brijender Singh had in 2010 recommended slashing of tariff by 23% based on his assessment that private companies were making profit as high as Rs 3,500 crore and all their claims of losses were allegedly fictitious.

The auditor, say CAG sources, would also look into certain policy matters where the Delhi government prevented its consumers from open access to choose which discoms to subscribe to. A similar option in Mumbai had led to one operator keeping its tariff 50% lower than its rival.

Kejriwal had also claimed during electioneering that tariffs for domestic consumers could actually be brought down by 50% as the discoms were allegedly fudging accounts by showing zero billing to big customers like the Delhi airport and the Delhi Jal Board (DJB).

with thanks : Times of India : LINK

Low voltage for Arvind Kejriwal's power vow

A 50% cut in retail rates at one go a tall order, say experts, as the cost of buying electricity is tangibly real and high.

While Arvind Kejriwal of the Aam Aadmi Party is set to take over as chief minister of Delhi, experts and industry alike say the poll promise of a 50 per cent cut in electricity prices seems far away.

Two listed private distribution utilities, Tata Power and Reliance Infrastructure, supply power in the capital city. R-Infra has  management control of BSES Rajdhani Power and BSES Yamuna Power.

These distribution entities say it is tough to decrease retail power rates. “The cost of power in Delhi has increased by 300 per cent since 2002, while the retail rate has increased by (only) 65-70 per cent. This has created a huge financial burden for all the private discoms in the city,” said a distributor who refused to be named.

The city’s power regulator had said earlier that the private discoms were facing as much as a Rs 19,500-crore revenue gap due to the difference between the price of the power they procure from generating companies and their retail rates. None of the companies responded officially to e-mail queries on the possibility of rate cuts.

Stock market analysts are wary of the consequences of the AAP taking charge. For, it had made corruption charges against Reliance Infrastructure-owned entities for allegedly artificially inflating the expenses. The stock of Tata Power fell by 1.7 per cent to Rs  89 in Monday’s trade; those of, while that of R-Infrastructure gained by 0.7 per cent to Rs 429.

Apart from other impacts, experts feel power rates could be reduced over time by reducing power procurement costs. The AAP has not specified any timeline on the rate reduction. However, a 50 per cent cut at a single go seems difficult.

Delhi’s discoms are short on internal generation. They procure power from West Bengal, Madhya Pradesh, Jharkhand, Uttar Pradesh, Himachal Pradesh, Rajasthan and Jammu & Kashmir.

“Power tariffs (rates) have two components — power purchase costs and operational efficiency, and returns to the investor. It is possible to reduce power purchase costs as equity returns are fixed and operation and maintenance costs can be reduced by bringing in efficiency and value,” said Umesh Agarwal, associate director at PricewaterhouseCoopers.

In Mumbai, the power purchase costs of R-Infra were reduced over time. “Reliance was buying expensive power from the market but now these (rates) have stabilised and not increased since,” said Agarwal.

Analysts suggest another way to reduce rates is if the government  takes a liberal view of own returns from the part-ownership it has of the private utilities. “The earnings of these utilities would anyway go to government coffers, so they could pass these on to the people,” said a power sector expert.

with thanks : Business Standard : LINK

From Bhagidari to AAP’s self-rule in cities

NEW DELHI: It was in January of 2000 that the capital was introduced to the concept of Bhagidari by the then first-time Congress government, under the leadership of chief minister Sheila Dikshit. The institution of a resident welfare association received official sanction.

Fifteen years later, the Congress government has left behind a legacy of 3500 associations registered under Bhagidari that are restricted to the planned areas of a city burgeoning with unplanned residential and commercial areas in its unauthorized settlements, resettlements and slums. The new AAP government now faces a big challenge as it would first have to reconcile the existing system with its objectives if it wants to introduce a participatory government model through mohalla sabhas.

According to the existing norms, the state government can spend developments funds only in planned and regularized areas through RWAs, market and industrial associations. It was to overcome this restriction and reinvent Bhagidari, that Congress - in a belated attempt to reach out to the angry aam aadmi - spoke of Bhagidari -II in its manifesto. It aims at linking associations from the areas out of the purview of the existing RWAs.

Even Kejriwal recognizes that reforms will require legal re-organization of the existing system. "There is widespread demand in Delhi for giving legal recognition to resident welfare associations. A draft Model Nagar Raj Bill was sent to all state governments by the Centre in which it was requested that they should make necessary amendments, using their intellectual discretion, and pass the Bill in their respective vidhan sabhas," says Kejriwal in his book, 'Swaraj'. He adds that while this is a big step by the central government to recognize the RWAs as a unit in the city, the draft falls short of vesting real powers in the RWAs.

"Civil society members have rejected the draft of the local government bill. Many prominent citizens ...have come up with a new draft for the local government bill which is being demanded by civil society," Kejirwal states. The amended draft says 3,000 individuals (voters) living in a specific locality of a city should be allowed to form an association. One representative should be chosen from the association of each locality with the help of the election commission.

Representatives of all associations of localities in one ward will form a committee. This committee will be headed by the ward councillor or MLA. All matters related to a locality must be managed by the association. They should take decisions through a voice vote and mutual consent of members of the ward. The ward committee must have independent revenue and hence should be empowered to collect taxes and get funds from corporation, state and central governments. The local association must have the power to summon government staff and contractors and stop their salaries or payments as a penalty.

with thanks : Times of India : LINK

Merry Christmas !

Merry Christmas !

Merry Christmas !

700 Lt free water : scope & possibilities : with thanks : NBT

Delhiites need not pay power bills till tariff reduces: Arvind Kejriwal

Private power companies in Delhi are in for a tough time if Arvind Kejriwal ends up becoming the Chief Minister of Delhi next week . Speaking exclusively to the India Today Group, the Aam Aadmi Party leader said his party is committed to slashing electricity tariff by 50 per cent, regardless of the consequences .

"Let Tatas and Ambanis leave if they want. We are committed to reducing the power tariff within the first four months of assuming office. There is no shortage of private companies in India. We will find other companies to handle electricity distribution if these companies decide to leave."

Arvind Kejriwal stressed that the government would step in and handle electricity distribution in case no private company was willing to replace BSES and Tata Power. "Private companies cannot blackmail the government and threaten that they will leave if the government doesn't let them continue with their crooked ways. We will put officials from these private companies in jail if they continue being dishonest. We cannot tolerate corruption. If no private company steps forward, the Delhi government will take over electricity distribution."

Kejriwal went to the extent of saying that the citizens of Delhi need not pay their electricity bills till the time the government slashes power tariffs. Kejriwal said, "Those consumers who want to pay their bills can do so and those who do not want to pay their bills need not do so till the time this process is completed. We will order an audit of the accounts of the private power companies and also have an independent agency do an audit of the electricity meters in people's homes. We hope to finish this exercise in four months." (Watch the interview)

Kejriwal's assertions are the worst possible news for the private distribution companies of the capital, which insist that they are deep in the red and have been petitioning the Delhi Electricity Regulatory Commission (DERC) for a 2-7 per cent hike in power tariff starting January 1, 2014. Private power companies claim they have aggregated losses of more than Rs 11,000 crore over just the last one year. BSES Rajdhani has sought a 3 per cent hike in power tariff, while Tata Power Delhi sought a 2 per cent hike, and the East Delhi discom BSES Yamuna had sought a 7 per cent hike in tariff from the DERC.

With the prospect of Kejriwal becoming the chief minister looming large, these companies are worried about what the future holds for them. When contacted, officials from both BSES and Tata Power refused to comment on record. However, a spokesperson from Reliance said, on the condition of anonymity, "BSES is already a loss-making proposition. We have already seen what happened in the case of the Airport Metro. We had to leave the Metro project, we may have to leave power distribution as well." 

Meanwhile, a spokesperson for Tata's NDPL said, "If Arvind wants to run the electricity business he is most welcome. It is beyond our understanding how Arvind can claim that he will buy electricity from producers at cheaper prices."

Apart from sounding the warning bell to power companies, Kejriwal said his other big priority would be to investigate the misdeeds of the Sheila Dikshit administration. "After passing the Lokayukta Bill, we will order a probe into all the scams of the Congress government over the last 15 years and of the MCD run by the BJP the last 7 years. All the ministers who are found guilty will be sent to jail. Just because Congress is supporting our government doesn't mean that they will get special concessions."

Kejriwal also taunted the established political parties, saying that Congress and the BJP do not know how to do politics. "Political parties think that they are laying a trap for us. What they do not know is that we are the ones who will trap them. We are teaching these parties how to do politics. Everything Aam Aadmi Party does these parties want to copy. All they seem to know is how to make money.'

Kejriwal seems to be marching in the direction of assuming office next week. His decision to seek SMS responses from citizens on whether he should form the next government in the capital has come in for criticism from all political parties, which are dismissing his move as a political reality show. But the Aam Aadmi Party leader is unfazed. "Everyone in the country knows that the Congress's track record in supporting minority governments is very bad. Tomorrow they can turn around and say Arvind coughs too much and so we withdraw our support. There was a big divide on whether we should take support from the Congress or not, so we decided to go to the people's court. This is the sort of participative, direct democracy that we hope to practice."

The BJP has been targeting Kejriwal arguing that this referendum style of politics can work in a small country like Switzerland but not in a big country like India. Kejriwal responded to the criticism saying, "There is not much difference between the size of Delhi and Switzerland. This criticism would be valid if we were holding a referendum across the country. We will not go to the people on every issue, but on an issue as important as this, it is critical to know what people think."

Kejriwal acknowledged that the public meetings and the SMS poll is not a very structured way of understanding public opinion but insisted that the 270 meetings would help the Aam Aadmi Party get a sense of the mood among the people of Delhi. Preparations are already on for a special session of the Delhi Assembly being called at the Ramlila Maidan in the beginning of January, where Kejriwal hopes to pass the Janlokpal version of the Lokayukta Bill.

with thanks : IndiaToday : LINK

BJP against power tariff hike: Vijay Goel

NEW DELHI: Vijay Goel, president of Delhi BJP, said on Saturday that his party was opposed to the move to hike the power tariff in the city again. The party will soon meet the chairman of Delhi Electricity Regulatory Commission (DERC), he said.

Discoms BSES Yamuna, BSES Rajdhani and Tata Power have filed petitions before DERC seeking a tariff hike of 2%-4% towards Power Purchase Adjustment Cost to be applicable from the next quarter.

Goel said BJP would oppose any such move. "We have been in favour of reducing the power tariff by 30%. The same we promised in our manifesto. The BJP believes it is time to go for a CAG audit of the accounts of discoms before allowing them to move a proposal for a hike."

with thanks : Times of India : LINK

In memory of Damini !