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Cover Story | April 2015

Reforms Failure

Government-led reforms - be it State or Central - have never seen parallel traction, especially when it comes to physical and financial implementation. And critical schemes like R-APDRP and RGGVY are hanging in limbo due to unrealistic timelines, contracts awarded to ineligible entities and the lacklustre approach of PIAs.

Consider this: the two reforms of the Central government-Rajiv Gandhi Gramin Vidyut Vikas Yojna (RGGVVY) and Restructured Accelerated Power Development and Reforms Program (R-APDRP)-have been marred by lacklustre approach by State governments, contractors shying away from bidding for new projects, lack of skilled manpower to implement IT infrastructure, delay in availability of land and lack of upstream network.

POWER TODAY, through this story, tried to highlight the status check of these two reforms and importantly, the issues that the officials of State Electricity Boards (SEBs) and the implementing agencies have shared with us.

Meanwhile, we also asked the contractors who had participated in these two reforms about how they have been benefitted. The answer-some chose to be silent, some chose to whisper and some chose to be vocal. The end result was ´miniscule´ in terms of opportunities.

As we go further, the story will also reveal which state has performed beyond expectations and which did not.

Is R-APDRP a white elephant in making?
POWER TODAY put forth this question to the officials of the Ministry of Power. But despite making a number of calls, and sending e-mails, the concerned authorities such as BN Sharma, Joint Secretary and KK Mishra, Deputy Secretary, who overlook R-APDRP reform, first refused to take calls and in later stages of follow-up, refused to give any details on the performance of this programme, almost making it the most secret programme of the government.

To start with, R-APDRP, a reform that no state could have imagined of, has been the talk of the nation ever since it was conceptualized. And why not, the programme was supposed to bring down, first, the aggregate technical & commercial losses (AT&C) and second, to strengthen distribution infrastructure.

To some extent, it does look like the entire program requires a major transformation. But in the current budget, R-APDRP has not been granted any additional outlay of funds, putting a full stop to the programme altogether. On top of it, the entire programme has been subsumed under Integrated Power Development Scheme (IPDS) which has been allocated Rs 9 crore and another Rs 16 crore has been given to Power Finance Corporation as a loan under IPDS. Now, what must have caused the Central government to put a full stop to this white elephant?

There are various reasons to back up this assertion. Since the program was divided into two parts û part A, which essentially covers the application of information technology in distribution utilities across the country and part B covers the strengthening, improvement and augmentation of the distribution system-the implementing agencies (IT contractors and SEBs) were program managers, managing the timeline and schedule and standardisation mechanism.

´Historically, state utilities have been using different IT applications, most of which ran as stand-alone applications with little or no integration. Due to lack of standardization, integration of these modules has always been a challenging and nerve-sapping exercise,´ says P Uma Shankar, former secretary, Ministry of Power. Upgrading these modules on a unified software platform involved process complexities, licensing issues and capital expenditure. There is lack of defined accuracy standards; data acceptance criteria and standardization of data preparation processes make it difficult to implement any uniform quality standards.

Contractors speak
Digging much deeper, those who are involved with part A of implementation, mainly IT giants such as Wipro, Tata Consultancy Services, HCL Technologies and IBM India are of the opinion that in terms of GIS implementation, the agency which gets the R-APDRP kind of project should have full capability of implementation. Currently, the organizations who have got the projects do not possess the capability of GIS, which eventually they pass it over to other organizations who are again pressurized to work with a stipulated budget with the primary organization, without understanding the full scope of GIS projects.

´The organizations which take the projects either are not fully capable of implementing the project or don´t have people with experience in performing the task except for one or two in each organization. The resultant is failure of the entire project,´ says a senior official from Wipro Technologies, who handles industrial automation and controls.

Some of the companies that POWER TODAY interacted with, went further and raised the question on the integrity of the government itself or rather on the implementing authority-PFC. An official from Tata Consultancy Services, who wished not to be quoted in the story, as TCS is still part of R-APRDP, suggested that it was important for the R-APDRP nodal authority to ask the concerned organization which has bid for a project, to implement all the aspects of the R-APDRP project for at least couple of substations and check the performance prior to issuing the order.

Meanwhile, agreeing with the lack of implementation in part A, Anil Kumar Sharma, Executive Engineer (R-APDRP), Dakshin Haryana Bijli Vitran Nigam, mentions that the underlying challenge was GIS mapping including online availability of entire network and assets (graphical view), geo-referencing of each asset, unique identity to each asset, identifying location of the consumer form, unique pole ID, network management and online tracking of changes in the network.

That said, RK Chugh, Vice-President and Head, Smart Grid Division, Siemens Limited in an earlier interview mentioned that a programme like R-APRDP calls for a disciplined execution and timely implementation of various parts of the programme in a well-coordinated way to make it viable for all stakeholders including suppliers and integrators.

Importantly, in the entire bidding exercise, IT companies have got their calculations wrong. The IT companies erred on estimating the cost of GIS and envisaged 4-5 per cent of the total bid value. But on the ground, they have realized that the money they have to shelve is 4-5 times more than in the bid. Hence this makes the entire part A implementation rather unviable.

Timelines unmatched
According to IT experts, the flaw in R-APDRP scheduling was fixing the same timeline for the entire gamut of solutions. And to some extent, the Central government too should be held responsible. The entire timeline scheduling should have been based on the objectives of the project-reduction of AT&C losses. And, for a utility it is the main task. Once the loss measurement infrastructure is in place, it is their task to reduce the losses by executing the system enabling projects, the project outlay of which is four times than that of Part-A. Unfortunately, the timeline for a state with 160 odd towns and 30 odd towns is same. This is where the time that can be spent on each town will come down, at the same time also impacting the quality. The question that is being asked is: how can all the states be judged by the same yardstick?

Now, with loans to be disbursed based on performance, R-APDRP is a race against time. Is the timeline set by the government realistic? One of the states that started work 15 months ago has just completed 0.5 per cent work.

Funding the white elephant
Now let´s take a stock of funding by the government´s nodal agency PFC. Under part-A of R-APDRP there are 1,402 towns covered for which the government has sanctioned Rs 5,500 crore and for SCADA implementation with 72 towns identified, it has sanctioned Rs 1,550 crore (see Summary Sanctioned Projects Part-A and Part B on page no. 27). In terms of disbursement, under part A, the PFC has disbursed an amount of Rs 2,700 crore already and for SCADA has released funds of Rs 403 crore (see table Summary Sanctioned Projects SCADA). Eventually, the extended implemen¡tation of part A has resulted in delays in execution of part B of R-APDRP. Under part B (sub transmission and distribution), PFC has sanctioned Rs 32,000 crore for around 1,250 towns.

´Importantly, the sanctions for part B towns depend on the progress of part A,ö says Subir Raha, GM (APDRP), Power Finance Corporation (for more updates refer to PFC interview on page no. 28).

PFC, until now, has disbursed only Rs 4,800 crore funds out of the sanctioned Rs 32,000 crore to the state governments for strengthening of sub-transmission and distribution. Hence, for the entire R-APDRP, the government has only disbursed Rs 7,990 crore out of Rs 17,900 crore, which is a government component.

Meanwhile, some of the states have shown tremendous progress on funding part A of R-APDRP. Consider this: Gujarat (84 towns) has spent Rs 152 crore out of Rs 230 crore, a 66 per cent utilization of approved cost, followed by Madhya Pradesh (83 towns and Rs 221 crore spending against Rs 275 crore), Maharashtra (128 towns and Rs 193 crore spending out of Rs 315 crore), Telangana (40 towns and an expenditure of Rs 118 crore against Rs 201 core), Uttar Pradesh (168 towns with an expenditure of Rs 447 crore against Rs 775 crore), Punjab (47 towns and Rs 155 crore against Rs 272 crore) and Karnataka (98 towns and Rs 221 crore against Rs 398 crore).

Speaking exclusively to this magazine, M Mahadev, Managing Director, Gulbarga Electricity Supply Company Ltd updated us on the implementation of part A as well as part B. He said that part A of R-APDRP in all the towns have been completed, part B is likely to be completed by June this year.

That said, several state implementing agencies have updated us on the status of part A and part B. Since most of the SEBs have asked for extension of deadlines for part A, they are very much optimistic about completion of the same. Meanwhile, some of the SEBs have gone beyond and have started working simultaneously on part A and B.

For Dakshin Haryana Bijli Vitran Nigam, the achievement has been certainly remarkable as it has completed all the commissioning activities as well as software deployment activities at the datacentre along with the disaster recovery centre, and the consumer care centre (CCC) has been made operational (for more updates on Dakshin Haryana refer to page no. 25).

On the contrary, the counter part of Dakshin Haryana, Uttar Haryana Bijli Vitram Nigam is optimistic about the completion of both parts by September 2015. Says RK Sharma, Superintending Engineer (R-APDRP), ´At present, the projects are still in the implementation phase, and with the extension granted by the Centre, we will complete it on time.´

Meanwhile, in terms of expenditure on part B, dominating the chart were north-eastern states. Himachal Pradesh took a lead in expenditure (which stands around Rs 122 crore against the approved cost of Rs 338 crore). The state has spent 36 per cent on system strengthening. Following suit were Assam, Manipur, Meghalaya, Mizoram, Sikkim and Uttarakhand (30 per cent spending out of approved cost). However, according to experts, the success of part A and B in north-eastern states is just because of the towns they have covered.

On the contrary, there are certain states which have not performed as they were supposed to be. States like Bihar with a target of implementing part A in 71 towns have managed to spend only Rs 58 crore as against the sanctioned cost of Rs 195 crore, making it just 29 per cent of achievement.

When asked about the implementation, SK Srivastava, ESE (R-APDRP), North Bihar Power Distribution Company Ltd, updated us on current happenings. He said that part A was scheduled to be completed in December 2014, but with some major delays in execution, the government had given the entity an extension till this year-end. However, he was confident on completing part B by June, this year.

Penalising the SEBs
Penalising those SEBs who have not executed the projects is a phenomenon never heard of even in worst cases. But SEBs, known to get away despite poor execution of projects, be it from Centre or State, have to think twice now, especially in R-APDRP projects. ´If the state utilities perform, then the entire loan, including the interest during construction period gets converted into grants, making the entire project free for any state utility,´ explained a senior official from PFC.

For part A, the SEBs must complete the project within the timeline or within the extended timeline, hence the loan will be converted into a grant. As of now, with the extension given by Power Finance Corporation, which was till September 2015, no single utility has been penalised. Meanwhile, if an SEB, given the stipulated timeline, is unable to execute a project, assistance from the government will be converted into a loan-a kind of penalty. SEBs would wish to avoid this scenario, due to their increasing debt levels (refer to box: SEBs slip further on page no. 29).

According to PFC´s assessment, and with the Ministry of Power holding monthly monitoring meetings taking a stock of the situation of implementation of R-APDRP, the entity is confident enough that every state utility will complete the project in the given timeframe.

That said, many experts that we contacted were of the opinion that in terms of execution of R-APDRP, those states which do not require reforms managed to implement and complete them, more than those states which required them the most.

Has the expensive bulb fused?
As a matter of fact, the same case is being mirrored in RGGVY. Touted to be the largest single programme to connect every village in the country, the world´s largest by nature of its sheer size, RGGVY has too witnessed the same fate as R-APDRP in terms of physical execution and expenditure. Let´s take a close look.

While digging dipper, POWER TODAY came across some shocking facts about the entire programme which raised the question on the earlier government´s approach towards RGGVY. According to an inside source from the Ministry of Power, who chose not to be quoted, inconsistencies were found in the figures which formed the basis of the targets for un-electrified and electrified villages that Ministry of Power (MoP) projected. There was scope for preparing cost estimates to CCEA for approval on a more realistic basis, based on available information with the MoP. Inadequacies in identification and estimation of un-electrified villages and BPL beneficiaries at the planning stage had the impact of variations in the cost estimates to the extent of Rs 2,262 crore.

In terms of financial management, as per a CAG report, analysis of the information available at REC in respect of 169 selected sample projects revealed that there was additional time taken by REC in release of funds to project implementation agencies (PIAs) which ranged from 16 to 162 days in 71 projects, 16 to 182 days in 64 projects and 16 to 209 days in 86 projects in respect of 1st, 2nd and 3rd instalments respectively. Both PIAs and REC were responsible for delays which impacted execution and project schedules.

Meanwhile, apart from implementation issues, the issue of large players shying away from bidding for RGGVY projects too has hampered reforms. The main reason was release of payment from the Centre. And for this, the Centre blames SEBs as they unable to send the closure report of the projects that have achieved milestones in many cases. For e.g., out of 576 projects (X-235, XI- 341), 281 projects (X- 168, XI-113) have been closed, PIAs/power utilities are yet to submit closure proposals of 197 projects (X-30, XI-167) to REC.

Ramesh Chandak, Managing Director & CEO of KEC International Ltd says, ´What we have witnessed was the number of large-size private contractors shying away from bidding for the next round of RGGVY and since then the projects have been implemented by mid-level contractors, where sometimes the quality of work is suspect.´

Another Mumbai-based contractor, who wished not to be quoted, says, ôMost of the contractors, including us refrained from bidding for more RGGVY projects due to payment issues.´

He adds, ´We are yet to receive the payments from SEBs of the work that we have completed in Bihar and UP.ö Meanwhile, the entire programme started showing a downturn when SEBs started giving contracts to the local contractors. This caused delays in project execution and importantly, contractors were not penalised for non-adherence to contracts. For e.g., to ensure completion of work as per schedule, each contract had a scheduled date of completion and a clause for levy of liquidity damages (LD). But out of 169 projects, against the contract dates for completion, there were delays ranging from five months to over five years in 149 projects. But still, SEBs, despite having an appropriate tool for control over contractors, did not made an attempt to even fix responsibility, even in cases where the delay would have primarily come from contractors´ end.

To be precise, despite delays on the part of contractors to complete a project on time, in 14 states, LD amounting to Rs 169 crore was not levied by PIAs. ´That shows how serious were the SEBs in terms of their action,´ says a junior official from the Ministry of Power.

While the state governments are yet to submit closure reports of the 197 projects sanctioned during the 10th and 11th Plan periods, a latest review of the rural electrification programme revealed that around 66 numbers of 33 KV sub-stations have not been commissioned.

Readers will be more surprised to know that around 29 projects amounting to Rs 548 crore were awarded to ineligible contractors in two states, i.e., Jammu & Kashmir (Pir Panchal Construction Pvt Ltd) and in Tamil Nadu (Tamil Nadu Small Industries Corporation Ltd). In the first case, despite the contractor not being registered with Commercial Tax department of the state of J&K at the time of bidding, the tender was accepted by the Chief Engineer of RGGVY and three works worth Rs 101 crore were awarded. In the second case, the contract worth Rs 447 crore for 26 districts was awarded to TANSI, despite the same not being a manufacturer of either distribution transformers, or conductors. Yet TANSI, a state PSU, was nominated as a turnkey contractor.

Status check on REC
According to a Ministry of Power report, which is in possession of POWER TODAY, till January 2015, out of 273 projects, 187 projects have been awarded, including the government issuing letters of intent. (See box: State-wise summary of RGGVY projects sanctioned under 12th Plan) Bids for around 17 projects are under evaluation. In addition for 48 projects, NIT has been issued and for around 21 projects NIT is yet to be issued. (refer to Award Status of XII plan projects RGGVY) Regarding 59 projects where NIT is yet to be issued, a government official says that these projects are mainly from Odisha, Jharkhand, Mizoram, Nagaland and Assam. He explained that in case of Jharkhand, DPRs have not been recast while in case of Mizoram and Nagaland, tenders were not floated as per Central Vigilance Commission (CVC) guidelines.

In case of Odisha the main reason of non-issue of NIT is delay in finalisation of implementing agency (PGCIL, NTPC and NHPC) by the government of Odisha. Out of total 31 projects of Odisha, PGCIL and NESCL have agreed on implementation of 13 and 12 projects respectively. For remaining six projects, NHPC has been requested by Odisha government to take up implementation.

When we questioned NHPC officials on neglecting the plea of the Odisha government, the official suggested that since they have no establishment in Odisha it would not be cost-effective for NHPC to implement these six projects. Hence, it was decided by the MoP that the remaining six districts may be allocated by Odisha government amongst NESCL (3 projects) and PGCIL (3 projects).

Thus, 16 projects shall be implemented by PGCIL and 15 projects by NESCL.

State-wise issues
Since RGGVY is a state subject, and Centre is just here to release the funds on the basis of performance, several states that POWER TODAY interacted with have come up with issues that have hampered the programme somehow. (refer to box: State-wise issues on page no. 33).

At the end, too much of water has flown under the bridge. The two great reforms-RGGVY and R-APDRP-if they had been implemented with intention of 24x7 power in mind, would have never faced the situation which has been highlighted in this story-unskilled workforce in SEBs and ability to execute. Meanwhile, POWER TODAY has observed throughout this story that building the rural distribution infrastructure without the ability to energise is a recipe for de-electrification of the newly electrified villages - as has been the case in the past and is already happening with the newly ôelectrifiedö villages under RGGVY.

And, unlike their predecessors, the current government should not make the same mistakes while implementing its two new reforms-Integrated Power Development Scheme (IPDS) and Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY). Meanwhile, here are a few suggestions that the government can consider while implementing these two reforms.

POWER TODAY suggestions
Strengthening of the State Electricity Boards is a must while implementing such reforms.
Making the deadlines realistic and practical instead of based on pure assumptions.
Setting deadlines on the basis of towns to be covered in IPDS and number of feeder separation systems to be implemented in DDUGJY.
Curbing the red-tapism of SEBs when it comes to payment receivables by contractors as most of the contractors are shying away due to stuck payments.
Encouraging participation of serious and large-level contractors; it will help SEBs to adhere to the deadlines set by implementing agencies for faster expedition of the projects.
Importantly, the government should come out with reliable and bankable DPRs.
States should clearly indicate roadmap for achieving objectives with data sheets & timelines.
In terms of distribution, the component of PFA Action Plan should be in sync with proposal submitted by State governments.
The government should have a solid revenue model that will ensure the sustainability of reforms that they have envisaged.
It is important for the nodal authority to ask the concerned organization likely to bid for any of the projects under these reforms, for at least implementation of a couple of substations and check the performance prior to issuing the order.

Quick bytes

  • Part A of R-APDRP covers 1,402 towns and Part B covers 1,250 towns.

  • Approved project cost of R-APDRP was Rs 39,244 core of which Rs 17,855 core was loan from GoI.

  • Till date disbursement was only Rs 7,939 crore in R-APDRP.

  • West Bengal, Gujarat, Maharashtra, Tripura etc. has already declared Go Live.
    MP, AP, Himachal Pradesh, Uttarakhand, UP etc. are on the verge of declaring balance towns Go live soon.

  • The aggregate net worth of the SEBs turned negative to Rs 46,169 crore in FY13 from Rs 858 crore a year ago.

  • Cost over-run for RGGVY was more than Rs 2,500 crore.

  • Power utilities are yet to submit closure proposals of 197 projects, further delaying the payments to contractors.

  • Around 149 projects have faced delays for more than two months to five years in RGGVY.

Around 66 numbers of 33 KV sub-stations have not been commissioned by SEBs.

SEBs slip further
As per a PFC report, most SEBs, barring a few, continued to tank despite marginal improvement in AT&C losses. To be precise, the aggregate net worth of the SEBs turned negative to Rs 46,169 crore in FY13 from Rs 858 crore a year ago. ´Some states such as Sikkim, West Bengal, Delhi, Uttarakhand, Kerala and Maharashtra earned profits (without subsidy) in FY13 while others like Haryana, Rajasthan, Jharkhand and Chhattisgarh showed a significant reduction in losses (without accounting for subsidy) compared to the year ago,´ the report says. However, the usual suspects like Andhra Pradesh (Rs 14,759 crore), Uttar Pradesh (Rs 2,315 crore), Madhya Pradesh (Rs 1,927 crore) and Karnataka (Rs 1,830 crore) dragged overall performance down.

The IPDS factor
Under the new initiative of IPDS, which will strengthen the distribution reform further, till now the government has sanctioned projects worth Rs 3,257 crore (refer to All India Summary for IPDS Funding). The project has awarded to to nine utilities across the country- Uttar Pradesh, Andhra Pradesh, Bihar (two discoms each), West Bengal, Gujarat and Madhya Pradesh. The projects have a timeframe of 30 months or 2.5 years. The estimated cost of the present scheme with the components of strengthening of sub-transmission and distribution networks, including metering of consumers in the urban areas is Rs 32,612 crore, which includes the requirement of budgetary support from the Government of India of Rs 25,354 crore over the entire implementation period. The rest of the funding will come from financial institutions or banks or state utilities from their own resources.

Under IPDS, up to 60 per cent of grants can flow from the government which was just 25 per cent under R-APDRP (part B). So utilities are more comfortable with the current form of the scheme now. Need assessment document to be prepared by the state utilities boards on priority basis such as AT&C losses, etc., which needs to be submitted to PFC and depends on the priorities by SEBs, we will release the fund.

Some of the State-wise Issues listed below:
Arunachal Pradesh
One sub-station yet to commissioned by APDA.
Closure Proposal for one project yet to be received.
3 substations yet to be commissioned by ASPDCL.
Gap in energisation of 142 villages.
Govt of Assam yet to release Rs 8.98 crore to PGCIL against state taxes.
ASPDCL to issue TDS certificates for the taxes deducted by Power Grid on their behalf.
There is a delay in commissioning of 2 substations.
There is a gap of 80 villages in energization.
Delay in commissioning of 12 sub-stations: PGCIL- 3, NHPC- 2 & NBPDCL-7
There is a gap in energisation for 567 villages pending due to non-commissioning of 12 substations.
SBPDCL to reimburse Rs 2.70 crore to PGCIL & NBPDCL to reimburse Rs 10.87 crore to NHPC on account of differential BPL amount.
Discoms to reimburse Rs 4.38 crore to PGCIL on account of land cost.
Govt of Bihar to issue Utilisation Certificate as submitted by NBPDCL so as to release funds to PGCIL for the Vaishali project.
Govt of Bihar to reimburse Rs 4 crore to NHPC towards state taxes.
Bihar Holding Company & SBPDCL to remit interest earned on subsidy to MoP account.
Madhya Pradesh
MPMKVVCL/Govt of MP to reimburse Rs 3.91 Crore to NESCL against differential BPL amount.
Poor performance of Era needs to be reviewed by MPMKVVCL.
Forest Clearance affecting 71 villages needs to be pursued by discoms.
19 substations pending for commissioning (JBVNL-8,DVC-8 & NESCL-3).
Gap in energisation of 786 villages.
JBVNL/GoJ to reimburse Rs 6.08 cr to DVC against differential BPL amount.
Forest Clearance affecting 960 villages needs to be resolved on priority.
Delay in completion of Ranchi project of NESCL due to RoW problems, JBVNL to take initiative to resolve the issues.
The government should take initiative for allotment of land so that DVC can award the DDG projects.

We will roll out systems strengthening tenders worth Rs. 387 cr by June
- Anil Kumar Sharma, Executive Engineer (R-APDRP), Dakshin Haryana Bijli Vitran Nigam
How was the performance of R-APDRP in Haryana?
The part A of R-APDRP has been awarded to HCL Technologies (SI), Navyuga Infotech (GSP) and Secure Meters (MDASP) in the year 2012. Under the IT infrastructure there are 36 towns to be covered and in these towns we have completed all the commissioning activities as well as software deployment activities at the data centre along with the disaster recovery centre, and the consumer care centre (CCC) has been made operational.

Till date, out of the 36 towns, business operations in 20 towns have been rolled out using the R-APDRP IT infrastructure and the software application. Of which, 12 towns have been declared as ægo-live´ towns. Go-live means when we start generating the AT&C loss report which is acceptable to the state utility board and Power Finance Corporation. For these 12 towns, the AT&C loss registration report has been accepted by the state electricity boards. And for the remaining eight rolled out towns the AT&C loss report has been generated in which certain verification, and validation of GIS data, and reconciliation of GIS data with billing data required to be integrated.

How has part A of R-APDRP managed to reduce the AT&C losses?
The part A of R-APDRP is only to create the base-line data for part B. The part A required digitising all the consumer account, its related information and apart from that, we need to imbibe the IT intervention into our entire business process. So, it doesn´t mean that part A will help any SEB reducing the AT&C losses from the word go. But nevertheless, the monitoring of the loss level has been started and has started at the micro level.

We have already started monitoring AT&C losses in 20 towns, so after having such stringent procedure of monitoring of AT&C losses, we have started implementing administrative majors in these towns. So with these administrative majors we have been able to reduce the AT&C losses in these 12 towns which are now have status of ´go-live´. This has resulted in showing us a tremendous loss reduction in AT&C. Meanwhile, since we have started quantifying the AT&C losses, now on monthly basis we appraise PFC and Ministry of Power on the quantification of AT&C losses in these town areas.

Can you give us a sense of what kind of reduction these towns have seen in AT&C losses?
The first town to ægo-live´ was in 2014 August and gradually we added another 11 towns till March 2015. Meanwhile, with system implementation, we have drastically reduced the losses. It will be difficult to quantify losses of each and every town because the losses are not same. There are certain towns in Haryana, in which the AT&C losses were 46 per cent, but due to implementation of IT infrastructure, we have been able to bring down to 26 per cent and the chances are high to reduce it further.

How about status of part B in terms of implementation?
We are yet to start the implementation of part B. For part B, the tendering process is underway and once the tendering process is complete, we will be able to start the implementation part. The total project cost under part B for Dakshin Haryana is around Rs 387 crore and tenders are likely to get awarded in the month of June.

Meanwhile, the Central government last year has come out with integrated power development scheme (IPDS). How many circles have been considered and what sort of opportunity will be there for private players?
Under IPDS we have already submitted need assessment documents to the Ministry of Power.

Since it is at initial stage, I will not be able to reveal much information about it. But the main emphasis is on strengthening of distribution infrastructure. Importantly, the need assessment document study is based on the priority of SEBs where they want to implement distribution infrastructure at priority level. It means, in the submitted documents there are circles or towns where the requirement of distribution infrastructure is more than any other town.

According to you what are the challenges a state government must be facing while implementing such an ambitious programme?
The underlying challenge while implementing IT infrastructure under part A is GIS mapping.

The GIS mapping includes online availability of entire network and assets (graphical view), geo-reference each asset, unique identity to each asset, identifying location of the consumer form, unique pole ID, network management and online tracking of changes in the network.

Since the GIS is backbone of working out the exact AT&C losses and it also requires integration, the implementation takes lot of time in terms of completion and building up of a reliable and acute data model.

Second challenge is the implementation of DT metering system in terms of maintaining. Because distribution transformers are all set up in the filed areas so you can focus the AMR for high value consumer as well as for the feeder. But in order to maintain the continuity of data from the DT metering system which creates a micro data is a tough task. The third challenge is capacity of people understanding the system integration. It means, we are currently facing the skilled manpower crunch of those who understand the entire IT infrastructure for power.

The only constrained about this programme is that it has not been able to complete in the defined timeline hence; every utility has made a proactive approach to the PFC and MoP seeking extension in the timeline.

´Under the risk of being penalised, SEBs will complete the project´
-Subir Saha, General Manager (APDRP), Power Finance Corporation
We are in the third year of 12th Five Year plan and since PFC is a nodal agency for the implementation the Restructured Accelerated Power Development and Reforms Programme (R-APDRP), how has this reform taken shape in the last three years?
Measures include intervention through GoI´s R-APDRP to fund State´s IT implementation in distribution and (distribution) strengthening/ system improvement in Urban Towns in its sub-transmission & distribution including an automated system of energy accounting & auditing through focused & performance linked investment by the States apart from investment in rural areas through RGGVY.

PFC, the designated Nodal Agency by the GoI, is operationalising the Programme under the ages of the Ministry of Power and it has come a long way. In financial terms, Government of India has approved Rs 39,000 crore worth of projects under R-APDRP, to State Power Utilities in the country, as below:

Part A focuses on setting-up of IT infrastructure in urban towns having population of more than 30,000 as per Census 2001 (10,000 in case of Special Category States) for measuring town-wise AT&C (Aggregate Technical & Commercial) Loss, without manual intervention. GoI is channelizing 100 per cent loans to utility through PFC for the purpose, which is fully convertible into grant, following R-APDRP Guidelines. Under Part A, SCADA is also being implemented in certain larger towns aiming at improved quality of services.

Under Part B, sub transmission and distribution system improvement measures are taken-up to reduce town-wise AT&C losses to 15 per cent or below. Around 25 per cent of the project cost is being funded with GoI loans (90 per cent in case of Special Category States) and the balance funds are being raised by Utilities concerned from PFC/REC/Banks or from their own resources. Upon successful completion of the scheme, upto 50% of the loans are convertible into Grant following R-APDRP Guidelines.

Meanwhile, in terms of physical progress, under Part A, more than 800 towns in the country are declared Live by concerned Utility, i.e., they are successfully communicating with data centre and generating energy audit reports. There is 1 Data Centre (DC) and 1 Disaster Recovery (DR) in every State apart from 1 Customer Care Centre in each Utility and all towns are connected to DC. GoI, through this Programme, has introduced state-of-art customised IT distribution solution to the States. Further, system improvement measures are bringing down town-wise AT&C losses considerably. So far, more than 200 towns are reported complete under Part B and achieving loss reduction.

If a state brings down the AT&C losses below 15 per cent, the assistance from government will convert into a grant but if not then it will be a loan; in such a situation what are the penalties on the state utilities?
This is a performance linked scheme call for sustained loss reduction over 5 years period for reaping the entire benefits envisaged for States. Under Part A, 100 per cent loan is convertible into grant (including interest capitalised) upon successful completion of the project, following R-APDRP Guidelines. Under Part B, upon successful completion of the scheme, upto 50 per cent (90 per cent in case of Special Category States) of the town-wise loans are convertible into Grant following R-APDRP Guidelines. There is a provision of prorate conversion in case of loss level not reduced upto 15 per cent level over 5 years period. Penalty could be in the form of non-conversion of loans (under R-APDRP) into grant in the hands of Utility. In case of non-achievement, under Part A the entire amount will continue to remain as loan in the books of the Utility. Under Part B, the Utility may loose upto 50 per cent (90 per cent in case of Special Category States) loan conversion, in case of non-achievement.

However, if the utilities are unable to complete part A and part B, what will be the penalties?
For part A, the state utilities must complete the project within the timeline or within the extended timeline the loan will be converted as a grant. As of now, with the extension given by PFC, which was till September 2015, no single utility has been penalised.

Meanwhile, the penalty will continue as a loan and will not be converted as a grant. A 4-tier review and monitoring mechanism is in place for the projects under R-APDRP leading to necessary timely interventions at appropriate levels. It may be observed that Utilities, being the owner, are responsible for project implementation and their operation. GoI, through PFC, is supplementing the efforts of Utility in project implementation. In view of requests received from States for extension of timeline for Part A implementation, GoI has considered them on case to case basis and based on merit of each case, are granting time extension for early project completion, to reap the benefits of the programme. It is envisaged that most of the States shall be able to meet the (extended) timeline in view of the sincere efforts being put-in by them. Conversion of loan into grant is yet to start.

Which are the utilities that have been able to achieve the timelines so far?
Major States like West Bengal, Gujarat, Maharashtra, Tripura etc. has already declared Go Live of all their towns and States like Madhya Pradesh, Andhra Pradesh, Himachal Pradesh, Uttarakhand, Uttar Pradesh etc. are on the verge of declaring balance towns Go live soon. Others are at various stages of completion of Part A. States like Jharkhand, J&K, Haryana, Goa, Odisha are requested to make special efforts to complete the Programme.

Are the state governments giving impetus to R-APDRP projects because we understand that there is a lacklustre response from state utilities when it comes to physical implementation and financial release?
The implementation of the Programme is reviewed by Secretary (Power), GoI on the 10th of every month with Chief Secretaries of States/MDs of Utilities in New Delhi in the MoP´s Review, Planning & Monitoring meeting. The States are taking the Programme very seriously and following-up every activity. Further to declaration of Town´s Go Live, the States/Utilities are generating Post Go Live Reports from the system in standard formats and also initiated administrative actions based on such Reports

But we understand that once the project is completed in the given time period, the government may end up releasing funds more in the form of grants...
There you are. For part B, the Central government has bifurcated states in to two categories-special categories states (North Eastern states, etc.,) as they get grant of 90 per cent and 10 per cent as a loan component. Whereas the other states, under part B, the state has to arrange for 75 per cent of fund and 25 per cent is from government. Now this seems to be a tricky financial part because under part B government is giving 25 per cent loan, and states are organising 75 per cent from various financial institutions. But government says, on the completion of the entire project, up to 50 per cent of the project cost will be converted into grant. But since the government is only releasing 25 per cent, it will take the risk of releasing for 25 per cent as a grant. It means, with the addition of more 25 per cent, the government will end up spending around Rs 23,000 crore as against given cost of Rs 18,000 crore. But it is subject to achievement.

That is where I am still stuck. If SEBs are unable to achieve the 100 per cent project completion then what stringent action will be taken by the government?
Since we have sanctioned Rs 5,500 crore for part A of R-APDRP, we expect that the large portion of it will be converted into grant. Based on the observations & commitments given in successive monitoring/review meetings, it is envisaged that a large no. of States will be achieving completion of Part A (IT) projects successfully and, therefore, conversion into grant will take place. Part A SCADA projects are taking shape now and so far, we have not observed any major issue holding their implementation. Under Part B, the State utilities are implementing the regular distribution projects; more than 200 towns have been declared completed by utilities across the country and others will follow.

GBS for components
SL No. Particulars Other Than Special Category States Special Category States Total
1 Total Cost of Works proposed for partial
funding by GOI
27116.7 4785.3 31902
2 Percentage of project cost proposed to
be shared by Gol as Grant
75% 90% -
3 Grant Component for works proposed
for partial funding by GOI
20337.52 4306.77 24644.29
4 Total Cost of Works proposed for 100%
funding by GOI
390   390
5 Fee of Nodal Agency and provision for
enabling activities for Ministry of Power
320   320
  Total GBS Requirement (3+4+5) -   25,354,29

Year-wise phasing expenditure in RGGVY
Year Expenditure
2014-15 500
2015-16 8000
2016-17 10000
Sub-Total (12th Plan) 18500
2017-18 10000
2018-19 7680
2019-20 2500
2020-21 2200
2021-12 2153
Sub-Total (13th Plan) 24533
Grand Total 43033

Year-wise phasing expenditure in RGGVY
Year Release of Grant
2014-15 500
2015-16 6500
2016-17 8000
Sub-Total (12th Plan) 15000
2017-18 5800
2018-19 5800
2019-20 2500
2020-21 2200
2021-12 2153
Sub-Total (13th Plan) 18453
Grand Total 33453

Summary Sanctioned Projects SCADA (All Cost in Rs. Cr.)
S.No. State Name No. of Towns Sanctioned Cost Disbursement
1 Andhra Pradesh 4 48.94 14.69
2 Assam 1 21.82 6.55
3 Bihar 1 22.02 6.61
4 Chhattisgarh 2 41.06 12.32
5 Gujarat 6 138.51 41.53
6 Haryana 1 24.29 0
7 Jammu & Kashmir 2 52.89 15.87
8 Jharkhand 3 70.23 0
9 Kerala 3 83.15 24.95
10 Madhya Pradesh 5 102.94 30.89
11 Maharashtra 8 116.57 48.49
12 Odisha 2 26.57 7.97
13 Pudecherry 1 13.89 4.17
14 Punjab 3 52.36 0
15 Rajasthan 5 150.9 45.28
16 Tamil Nadu 7 182.17 54.65
17 Telengana 2 77.62 23.29
18 Uttar Pradesh 12 280.81 79.96
19 Uttarakhand 1 16.55 4.11
20 West Bengal 3 32.94 9.88
    72 1556.23 431.21
Source: Ministry of Power

All India Summary for IPDS Funding (All Cost in Cr.)
S. No. State Name Utility No. of Circle / Zone / Utility Town Covered Approved Project Cost Gol Grant Approved Grant Released Proejct
1 Andhra Pradesh APEPDCL 3 15 222.42 133.45 0
2 Andhra Pradesh APSPDCL 3 27 208.08 124.84 0
3 Bihar NBPDCL 1 6 171.06 102.64 0
4 Bihar SBPDCL 1 9 73.26 43.96 0
5 Gujarat MGVCL 5 38 372.92 223.75 0
6 Madhya Pradesh MPPKVVCL-W 2 20 72.58 43.55 0
7 Uttar Pradesh PaVVNL 21 82 457.96 274.78 0
8 Uttar Pradesh PoVVNL 2 9 604.46 362.68 0
9 West Bengal WBSEDCL 5 41 1069.33 641.6 0
    Total 43 247 3252.07 1951.25 0
Source: Ministry of Power

Status of implementation of DDUGJY-RE as on 28/02/2015
State Proejcts Financials (Rs. Crores) Achievements In percentage
Andhra Pradesh 16 556.22 549.14 99%
Gujarat 25 314.98 312.33 99%
Haryana 21 172.99 172.68 99%
Telangana 10 309.89 288.33 93%
Assam 24 2822.19 2551.1 90%
Meghalaya 7 459.17 406.37 89%
Mizoram 8 317.23 283.66 89%
Nagaland 11 268.48 238.79 89%
Tripura 4 196.87 175.73 89%
Uttarakhand 13 785.71 685.9 89%
Jharkhand 22 3496.82 3065.88 88%
Sikkim 4 217.92 191.03 88%
Himachal Pradesh 12 335.29 290.56 87%
Jammu & Kashmir 14 954.04 833.3 87%
Rajasthan 40 1278.16 1112.08 87%
Karnataka 27 1004.39 851.56 85%
Maharashtra 35 697.25 595.85 85%
Manipur 9 437.33 372.46 85%
Tamil Nadu 29 385.46 328.79 85%
Odisha 32 3948.18 3331.42 84%
Arunachal Pradesh 16 1030.88 859.39 83%
West Bengal 28 2914.94 2372.29 81%
Madhya Pradesh 52 2867.13 2008.27 70%
Chhattisgarh 18 1387.4 928.45 67%
Kerala 14 237.59 160.18 67%
Bihar 54 7438.86 4871.96 65%
Uttar Pradesh 86 8225 4911.27 60%
Punjab 17 183.91 56.9 31%
Total 648 43244.28 32805.67  
Source: Ministry of Power

RGGVY scheduled duration along with a break-up of year-wise, component-wise expenses (Rs in Cr)
Sr No Proposed Works Amount
A Item of works proposed for partial funding by GOI
1 Feeder Separation/ New Feeders (16500 Nos. feeders and associated works) 24750
2 2 33 KV/66 KV Line (21900 Ckm) 1,515 4045
3 3 Sub-station Works - 33 KV or 66 KV (1620 new sub-station, augmentation
of 1615 existing sub-station)
4 4 LT Infrastructure works (LT lines with bare conductor/Arial Bunched cables
& Distribution Transformers)
5 Metering at Feeders, distribution transformers & Consumers 6,450
  Sub total (A) 42,110
B Item of works proposed for 100% funding by GOI  
7 Establishing Missing link of Optic fibre (Upto Sub Stations under
National Optic Fibre Network-NOFN)
8 Creation of Rural Electrification Data Hub at Rural Electrification Corporation 10
9 Project Management Consultant (PMC) @ 0.5% of total cost of works
[0.5% of A]
  Sub-Total (B) 501
  Total Project Cost (A+B) 42,611
C Fee of Nodal Agency and provision for enabling activities for Ministry of Power
10 REC fee @0.50 % of total cost of works (A) 211
11 Provision for MoP for enabling activities @0.50 % of total cost of works (A) 211
  Sub total "C" 422
  GRAND TOTAL (A+B+C) 43,033
Source: Ministry of Power

State-wise summary of RGGVY projects sanctioned under 12th Five Plan (Rs. Crore)
State Projects Sanctioned Cost
Assam 16 1621.06
Bihar 38 8350.69
Chhattisgarh 6 460.62
Haryana 3 17.02
Jammu & Kashmir 3 101.28
Jharkhand 17 1260.93
Karnataka 11 180.58
Kerala 7 89.83
Madhya Pradesh 54 2273.3
Maharashtra 1 35
Manipur 6 204.73
Mizoram 8 77.11
Nagaland 11 92.3
Orissa 31 1007.31
Rajasthan 28 1453.91
Tamil Nadu 3 37.27
Tripura 8 316.23
Uttar Pradesh 86 10740.15
West Bengal 8 713
Grand Total 273 29032.32
Source: Ministry of Power

Award Status of XII plan projects RGGVY
States Projects Sanctioned (In Rs. Cr.) NIT issued Awarded
Assam 16 1621 16 16
Bihar 27 5221 27 27
Chhattisgarh 4 285.6 4 3
Jammu & Kashmir 3 101.28 3 0
Jharkhand 17 1260.92 10 0
Karnataka 9 103.9 7 0
Madhya Pradesh 34 1426 34 33
Manipur 6 222.17 6 6
Mizoram 8 77 8 8
Nagaland 11 92.33 11 0
Odisha 31 3547 28 0
Rajasthan 28 1454 28 13
Tripura 8 316.23 8 8
Uttar Pradesh 64 7282.8 38 16
West Bengal 7 609.6 7 7
Total 273 23620.83 235 137
Source: Ministry of Power
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