Pankaj Thapliyal, President-Smart Utilities, Essel Utilities Distribution Company Ltd
Tell us about your company and the sectors it is involved in...
We have a business model where we are in both B2B and B2C markets. Our B2B endeavours include roads, transportation, power transmission lines, ports and metro rails among others; while our B2C business deals in providing integrated utilities like power, water, gas and internet to the masses.
In the power sector, specifically, we are in the transmission and distribution (T&D) segments for conventional and green energy (solar rooftop and waste-to-energy) and also provide services like smart metering, which we have begun piloting. As a distribution company (discom), we are operating in two circles--Nagpur and Muzaffarpur, where we ensure that customers have uninterrupted power supply. We currently have 8.5 lakh customers in the power sector alone, and at least 10 lakh across all verticals, and are the only integrated utility provider in the country. This also benefits the customer as they get only one bill instead of five-six different ones a month. This is what differentiates us from our competitors.
Kindly elaborate on the work you do for the Nagpur and Muzaffarpur circles.
From the customers perspective, they want uninterrupted power supply at an optimal price, access to knowledge about their consumption levels at frequent intervals and online facilities like bill payments. While our goal is customer satisfaction, and to meet which we are developing a mobile application (app) to benefit our customers on the service side.
BS Srinivasalu Reddy In terms of power supply, we ensure optimisation in maintenance of the infrastructure aimed at identifying and solving problems like AT&C losses, occurring through power theft, faulty lines or breakdowns. We have, thus, made marked improvements and brought down losses in the Nagpur circle from 40 per cent to 16 per cent and in Muzaffarpur circle from 60 per cent to 20-25 per cent. We plan to bring down these losses to single digits.
Besides, we also offer smart metering systems, which enables online monitoring, remote detection of faults, real-time updates and disconnection and re-connection to the grid, beside allows the consumer to keep track of their consumption and eliminates manual metre reading process.
What has been the government´s support for private players in the sector?
The government though encouraging, has been cautious about private players in the power sector. This is because some of those that have tried their hand here have either not been able to live up to the expectations and moved out of the sector or have not taken the task seriously enough. However, we are the ones who have shown the way - if you are serious about the sector, you can really do wonders, and we now hold 50 per cent of the market revenue and customer base.
At both places - Muzaffarpur and Nagpur - there has been huge customer buoyancy in terms of service level appreciation. We have brought about a huge improvement in both supply of power and resolution of complaints, which means that service levels have gone up. Our surveys show that customer satisfaction ratio in these circles have gone up to almost 99 per cent.
We are also eyeing many other circles, where the government has invited private players. The good thing is that, even the government is seeing a huge value in inviting private players. I can tell that a lot of business in the power sector in states like Rajasthan, Bihar, Jharkhand and Uttarakhand, where the losses are immense, will be privatised in future. We are at a stage where we are evaluating our business model and are ready to participate in the tenders which will be flouted. We have our own in-house team for maintaining the infrastructure in a professional manner.
What are the advantages of privatisation in the power distribution sector?
The major demand by consumers is that they want 24x7 electricity supply, at reasonable cost, and without delay in addressing problems. For this, we have a 24-hour dedicated call centre and are rolling out an app for our customers. Another issue we have tackled is the ´queue´ for payment through provision of online payment. In fact, around 30 per cent of our customers pay bills online.
From infrastructure perspective, we again have a robust 24-hour active team managing our network, which has significantly raised our reliability quotient, compared to the earlier disptensation.
Thirdly, we have a preventive maintenance team, that subverts any faults that occur during peak time.
Thus, our year-on-year (YoY) serviceability has risen because of proactive measures that we have taken up, like investing in the right market and infrastructure, reduction in disruption and downtime and downturn on the infrastructure. These steps have also created goodwill for us in the minds of the customers and gives us an edge as private players.
How do you manage cost and efficiency?
For checking technical losses, we rely on proper investment and maintenance practices, but commercial losses are huge, where government discoms fail. As private players, we bring to the table efficiency and smarter use of technology, in terms of collections. In the process we are bringing down arrears. The key is that customers should pay for what they have used. We are very vigilant and strict about tracking power theft and taking the appropriate action against such erring parties.
How the whole contract works and what are your responsibilities...
We have end-to-end responsibilities given to us by the discoms to maintain every aspect of the infrastructure right from sub-station level to feeder level to DTC and then transformer level, and so on. Furthermore, we also supply to both domestic consumers and high tension (HT) customers.
How we work, is that the price for electricity per unit is fixed and the government gives us the invoice against which we bill the customers based on their usage. That is, if we provide 100 units and the government bill is Rs 100 - we break-even. These losses can be mitigated by ensuring proper collection from the customers, having an efficient infrastructure and good management of resources and network, keeping in mind that through this whole process, the benefit reaches the consumers. Ultimately, we have a service oriented approach. We even go a step further and segment our customer base on the basis of their consumption levels. A high-end consumer will be segmented and receive additional services that create a wow factor. Thus, we are moving in a whole consumer centricity of business, which was never heard of in this sector.
To what extent should discoms take up privatisation and in what areas of the country?
I think it should be all across the country, but implementing this needs political will. If you see, pricing is controlled by the government, not us, as we are simply undertaking the distribution and collection aspects. But, as I see this sector, going forward there should be three-four players in every city and state, from amongst whom the consumer should be able to choose the service provider they want, also each company should be able to set their own pricing. This way the sector can have value addition and proper competition - the way it is done in telecom sector.
- BS Srinivasalu Reddy