Privatisation of Agra, Vns discoms: New pvt entities to begin operations with clean slate

The new private entities to be carved out the existing PuVVNL (Varanasi) and DVVNL (Agra) Discoms, as proposed by the Uttar Pradesh government, will begin with a clean slate, free from loan liabilities, arrears, and other financial burdens.
The UP Power Corporation Ltd (UPPCL) that is scheduled to have 49% of the total share in the private entities with 50% equity will be responsible for repaying the loans taken from the state and Central governments, banks and financial institutions.
“The private entities will start with a clean slate with no burden of paying the loans taken by the Discoms that are proposed to be broken into more than two entities,” a senior UPPCL official said.
Arrears of consumers of these Discoms will also remain UPPCL’s responsibility. However, the private entities will be tasked with recovering these dues within their jurisdiction and remitting them to UPPCL, with incentives tied to the recovery performance.
An internal document sourced from the UPPCL shows the Agra and the Varanasi Discoms having the worst financial parameters among the five state-owned power distribution companies, in certain respects. And the government has made the same ground for the privatisation of these two loss-making Discoms.
Up to September of this financial year, the aggregate technical and commercial (AT&C) losses in the Varanasi Discom were found to be 33.48%, the highest of all the five discoms, followed by the Agra Discom’s 25.76%. Against this, the AT&C losses of Meerut, Kesco
and Lucknow Discoms were 11.41%, 13.48% and 18.74% respectively. The UPPCL’s average losses in the same period were 2.97%. All the five companies are UPPCL subsidiaries.
The collection efficiency of Varanasi and Agra Discoms was also the lowest at just 80.68% and 90.03%, respectively, against the Meerut’s 101.42%, Kesco’s 95.7%, Lucknow’s 95.56% and the UPPCL’s average 93.57%.
However, the percentage of consumers who have never paid their bills against the total no of consumers is the highest in the Varanasi Discom at 28.57% but the Agra Discom, in this regard (11.77%), fared better than Lucknow Discom (18.50%).
Interestingly, the per-unit revenue realisation (thru rate) increased in Agra and Varanasi by 0.58 paise and 4 paise per unit, respectively, between April and September. In contrast, the other three Discoms reported a decline in their thru rates during the same period.