central power ministry has ranked the Kerala State Electricity
Board (KSEB) among the 10 worst performing boards in the
political decision to roll back the August 2002 power
hike and the highly subsidised domestic tariff are among
a host of other factors that have been identified as reasons
for the poor performance. The ministry has also warned
the Kerala government that it has a difficult task ahead
if it is to bring the power sector back to an even keel.
The new scoring,
announced on 8 January 2003, has bracketed Kerala with
Jammu and Kashmir in the 16th position. The KSEB has scored
only 32.5 out of 100 in the rating, according the study
jointly carried out by Credit Rating Information Services
of India Ltd (Crisil) and Investment, Information Credit
Rating Agency (ICRA). The KSEB is also the worst performer
among other southern states, figuring below Andhra Pradesh
(71.5), Karnataka (68) and Tamil Nadu (47.5).
Other states joining
Kerala at the end of the rating are Madhya Pradesh, Meghalaya,
Sikkim, Tripura, Assam, Nagaland, Manipur, Mizoram, Bihar
and Arunachal Pradesh.
The study, mandated
by the Power Finance Corporation (PFC) under the Accelerated
Power Development and Reform Programme, is aimed at creating
a performance framework that will benchmark all states
on a common platform.
According to the
Crisil-ICRA findings, the Kerala government has not been
very supportive in terms of legislation or finances. The
setting up of an independent electricity regulatory commission
(ERC) is long overdue and there has been no major legislation
to reform the power sector. The government has also not
released any subsidy for the last 10 years and is among
the worst performing states on this front.
parameters (generation, transmission and distribution),
the rating has given positive marks to the KSEB for its
collection efficiency on the basis of self-reported billing
in the high-tension sector. While suggesting areas of
improvement, the rating said the practice of self-reporting
by Kerala consumers has led to inaccuracies in assessing
the loss levels within the system.
A large number
of meters, estimated at over 8 lakh, are defective or
sluggish. The KSEB, therefore, needs to make significant
efforts to improve both its metering and billing efficiencies
if it is to reduce the loss levels in the transmission
and distribution system. On the generation side, the operating
efficiencies are far lower than the better-ranked states
and require significant improvements, the study
The notable positive
is that efforts are being made to obtain multilateral
funding for improving the power sector in the state. A
search committee is also in the process of identifying
members for the ERC, which is to be set up. The KSEB has
begun taking steps towards creating separate profit centres
for generation, transmission and distribution.
for the states ranking to improve will be a significant
improvement on the state governments intention to
reform the power sector and its subsidy-paying track record,
as both are prerequisites to reforming the power sector.
will also show an improvement if it operationalises its
ERC and implements a tariff rationalisation so as to bridge
the gap between power purchase costs and realisations,
the rating pointed out.
Crisil-ICRA rating will be used by the power ministry
and the PFC for preferential allocation of Accelerated
Power Development and Reform Programme (APDRP) funds,
interest rate setting or allocation of power to deficit
states from the central pool.