National auditor slams Tamil Nadu Electricity Board

Vol 4, PW 10 (21 Jun 00) Midstream & Downstream

Indias national accounting watchdog, the Comptroller and Auditor General (CAG), has issued a damning indictment of the Tamil Nadu Electricity Board (TNEB).

In a report put before the Tamil state legislature on May 18th, CAG concludes that if TNEB had managed its affairs better, it could have provided escrow cover to another half a dozen projects. CAGs most damning indictment comes in the area of Transmission & Distribution (T&D), where it notes a trend ofrising T&D losses.

Against the Central Electricity Authority (CEA) norm of 15.5%, reads the report, T&D losses (at TNEB) amounted to: 22.6% in 1994-95 24.9% in 1995-96 26.2% in 1996-97 27.8% in 1997-98" The report adds that the excess of T&D loss over the CEA norm of 15.5% translates into12bn units, valued at Rs2,132cr ($496m). The state electricity minister Arcot Veeraswamy never misses an opportunity to claim that T&D losses in the state is less than 17%, writes an analyst in Chennai, But the CAG has calculated that most of the T&D losses are hidden under free supplies of electricity to farmers.

He adds: The CAG has not only vindicated what has long been suspected, but has also put a figure to it. CAG notes that T&D operations also suffered because of a lack of synchronization between the construction of sub-stations and the laying of transmission lines.

Sub-stations constructed at a cost of Rs39.83cr ($9.3m) stood idle for nearly 25 months after completion. The following table illustrates this lopsided development.

Sub-stations built Transmission lines (CKT km) Target Achievement % Target Achievement % 1996-97 67 43 64 1,815 624 34 1997-98 61 60 98 1,250 581 46 1998-99 81 61 75 1,613 751 47