Rajasthan’s discoms have accumulated losses of Rs. 77,453 crore

April 4, 2015

Rajasthan is readying to invite private participation in power distribution from next year, eyeing investments of Rs. 5,000-6,000 crore as it aims to add 30 lakh customers in the next five years.

The state plans to move to public-private partnership (PPP) from the current government ownership of distribution companies or discoms and reduce annual revenue gap of Rs. 15,000 crore through various steps, including reduction in transmission and supply losses and increase in tariffs.

“By the beginning of the next financial year we aim to bring out bidding documents for private participation. We won’t cover the entire state in one go but in phases, each of which will have a mix of high-loss urban and semi-urban areas,” Rajasthan’s principal secretary for power Sanjay Malhotra told.

Prominent power companies, including Torrent Power, Adani, Tata, Reliance, Essar and Reliance seem to be interested, he added. Rajasthan’s discoms have accumulated losses of Rs. 77,453 crore and a wide gap between revenue and costs persists despite four tariff hikes in as many years.

According to official data, during 2013-14 discoms lost about Rs. 1.60 on each unit of energy sold due to as much as 26.4% distribution losses.

Bharatpur, Kota, Ajmer and Bikaner could be the areas where private sector participation could be invited. According to Malhotra, Rajasthan plans to adopt a mix of the distribution franchisee and concessionaire model, in which the private partner is not merely a contractor.