Gujarat discom tops Power Finance Corporation (PFC) list of performers

Dakshin Gujarat Vij Company Limited (DGVCL), an electricity distribution company (discom), has topped the first-ever list of performers in its segment.

In the first survey of its kind, Power Finance Corporation (PFC) evaluated the health of Indian discoms  which are often called the weakest link in the chain of electricity generators, transmitters and distributors.

The survey results show it is now possible to discuss discoms in terms of relative performance.

Gujarat has four discoms; all of them now enjoy ‘A+’ rating.

In a related development in New Delhi, junior power minister Jyotiraditya M. Scindia unveiled the first integrated ratings of 39 discoms on Tuesday. The ratings were accorded by Icra and CARE, while PFC co-ordinated the survey.

The method of rating was formulated by the power ministry in July 2012 using tariffs, losses, collection and service quality as parameters.

The ratings are expected to motivate discoms to upgrade their health and turn profitable.
While Gujarat topped the list, discoms of Maharashtra and West Bengal received grade ‘A’.

The worst performers were discoms of Uttar Pradesh and Tamil Nadu, sources said. The complete report will be available on the power ministry’s website shortly.

The draft 12th five year plan notes that the cumulative book losses (on accrual basis) of discoms have increased from Rs79,339 crore as on March 31, 2009 to Rs1,06,247 crore at March-end of  2010. The net worth of discoms has also decreased from Rs31,972 crore to Rs14,786 crore.

“While this is a reflection of lower tariff, it also reflects high aggregate technical and commercial losses which reduce the average revenue realised,” said the draft plan.

In fact, the Comptroller and Auditor General said in a recent observation that defaults in payments, non-metering of consumers, inadequate energy auditing, inadequate investments in upgradation of the distribution system are some of the issues that need to be urgently addressed by the loss-making discoms.

“While it is commendable that some states are doing well, the bigger concerns are the states which are deep down in losses and unless that is addressed, it will be difficult to access the funds to be released under the 12th five-year plan,” said an expert from a ratings agency.

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