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Massive investment by UHBVNL without cost analysis
ROHINI SHARMA

Chandigarh

The distribution companies or discoms have resorted to massive investment on high voltage distribution system (HVDS) without cost benefit analysis and feasibility study in Haryana. An official assessment by the Comptroller and Auditor General of India (CAG) has revealed that Uttar Haryana Bijli Vitran Nigam Limited (UHBVNL) has done unfruitful expenditure on HVDS in Nanu Majra village under Bahadurgarh village.

The company implemented HVDS in Nanu Majra village at a cost of Rs 3.61 crore by installing 245 distribution transformers (DTs).

However, the benefits of the scheme in the shape of reduced losses could not be availed as the operation wing could neither relocate the consumer meters outside the premises of consumers nor could replace the sluggish electro mechanical metres with electronic meters due to resistance from consumers. The report has noted that energy losses even after introduction of HVDS were above 70 per cent. Thus, investment of Rs 3.61 crore was rendered unfruitful.

In reply to CAG, UHBVNL stated that the project had not succeeded because the company did not want to aggravate the law and order situation due to consumer’s agitation. The reply, however, was not found to be convincing because the work relating to replacement of metres should have been completed before incurring heavy expenditure on HVDS. The company decided to implement HVDS scheme on rural agriculture feeders in four circles--Karnal, Kurukshetra, Kaithal and Rohtak. CAG has stated that before going for the implementation of HVDS at a massive scale, the company did not wait for the results of HVDS at Nanu Majra village.

The discom neither conducted any study of practices being followed by other states nor carried out proper cost benefit analysis. The approval of Board of Directors (BOD) was also not obtained before launching HVDS. It is pertinent to mention that the scheme had been failure in Delhi and the number of DTs would go up to seven to eight fold, which would add on their losses into the system.

“It was, therefore, imprudent to go for huge investment with only small gains. In view of this, the senior officials of the power department directed that no fresh expenditure should be incurred on HVDS. Hence discoms also constituted two committees to look into the financial implication of HVDS,” said a source in UHBVNL. After the complete review of the whole matter, the firm in reply to CAG has decided to get a cost benefit analysis through a third party. The reply is not convincing as the company should have considered financial health, techno-economic viability and cost benefit analysis of the scheme before making the investment.