Privatization may overburden Consumers
Abrar A. Mattoo
SRINAGAR, Aug 30: In the year 1995, JKPDCL – Jammu and Kashmir Power Development Corporation Limited was incorporated as a Private Limited company. The act was done with an aim to build a prosperous business enterprise to benefit the exchequer.
However, ever since, the corporation has recorded an average loss of nearly 60-70 % annually, leading the corporation into an Rs. 10,000 crore debt as of March 2021.
During the financial year 2020-21, JKPDCL recorded a staggering 67.59 % technical and commercial (AT&C) losses, out of which nearly 9% resulted from inefficiency in the collection of billed amounts.
Although Jammu and Kashmir is entitled to 12% royalty on the installed capacity of nearly 2,029 Mega Watts of power, the Jammu and Kashmir Power Development Corporation Limited, being a business enterprise of the government has to buy every unit of power in Power Stock Exchange of India.
Annually, for a staggering amount of Rs. 6,000 Crore, Jammu and Kashmir Power development corporation Limited buys a sum total of 17000 Million Units of power from sellers like NHPC – National Hydro-Electric Power Corporation Pvt Ltd., and JKSPDC – Jammu and Kashmir State Power Development Corporation.
Surprisingly, during the financial year 2020-21, due to predetermined tariffs, out of these 17,000 Million Units of Electricity, only 3,000 million units were billed at an amount of Rs. 2700 crore.
Additionally, during the financial year 2020-21 due to inefficiency in the collection of billed amounts, only 2300 Crore were collected from the end-users in Jammu and Kashmir, adding further to the technical and commercial loss and taking it to the staggering 67.59 %.
It’s important to note, Jammu and Kashmir records the highest Aggregate Technical and Commercial (AT&C) losses in the country.
Pertinently, the major contributor of the loss to JKPDCL is hooking done by metered consumers and unethical use of power by unmetered consumers.
Nearly 60% of the consumers in Kashmir are unmetered, while the bare wires make the hooking an easy option for the rest of 40% as well.
“Hooking is a huge issue that people need to see as an unethical act in Kashmir. Despite government subsidy, we are facing a huge loss,” Dr. Aijaz Ahmad Dar, Chief Engineer JKPDCL said while speaking to Kashmir Despatch.
The government of Jammu and Kashmir pays an amount of Rs. 1200 Crore on subsidy for the purchase of power in Jammu and Kashmir. From 5% to 60 %, almost all the consumers in Jammu and Kashmir are availing the government subsidy.
The experts see the hooking and unmetered consumers as the main reason behind the rampant power cuts and deficit of electric energy in Jammu and Kashmir.
On average, the JKPDCL has been found to be nearly 20% in deficit during the past few years. In other words, this means that despite the fact that each and every unit of power is purchased, the power corporation could only buy 80% of the power against the required energy, giving rise to the power cuts and shutdowns, especially during the winter, when the deficit is highest.
Furthermore, In light of the Centre’s push for privatization, the experts fear that the AT&C losses at JKPDCL would unprecedently burden the end-consumer and government together. They assume that once the JKPDCL is privatized, the losses would be either collected from the end-consumer, or the government would have to increase the subsidy and empty its coffers over needless expenditure.
“At the moment, the government of Jammu and Kashmir is bearing the losses, but once the corporation is privatized, or monetized as they call it, the end consumer, I fear, would be immensely burdened. The Average mean cost per unit Consumption in Jammu and Kashmir is Rs. 5, and then, when we consider the consumption of an average household in Jammu and Kashmir, we can only imagine the hole the monthly electric bill would cause in the household income,” a senior official from JKPDCL commented while speaking with Kashmir Despatch.
Hopefully, in the coming years, 7953.00 Mega Watts of power generation is set to be achieved, and since Jammu and Kashmir would receive an increased share, the loss in revenue might be curtailed. The current installed capacity of power generation in Jammu and Kashmir is only 2000 Megawatts approx., out of which the Union territory gets a 12% royalty. The estimated potential of 16400 MW’s of power has already been identified, while the actual potential is said to be more than 20,000 MWs in Jammu and Kashmir.
If the capacity increases, naturally the Union territory would see a lesser number of power cuts and a reduced percentage of losses in revenue. But till then, the losses faced by JKPDCL would remain burning a hole in the already-burdened coffers of the Jammu and Kashmir government.
