The eye opener
The power sector in Jammu and Kashmir has been one of the major worries for all the governments during the past three decades now. The mounting losses in the sector have proved to be the biggest impediments for growth and development in various other sectors as the losses have meant that the spending on other sectors has taken a hit.
The recently released CAG’s performance audit of power purchase agreements and electric revenue collection for 2012-13 to 2016-17 have brought out deficiencies in Jammu and Kashmir Power Development Department (JKPDD) highlighting the gross negligence on the part of the officials of the department.
The CAG in its report has flagged short comings in power purchase planning, signing and operationalisation of power purchase agreements, and collection of revenue. Besides, it also pointed out financial mismanagement and weakness in internal control.
JKPDD failed to recover its power purchase cost due to operational inefficiencies like increasing gap between average cost of supply and average billing rate, high aggregate technical and commercial losses, which were at 62.56 per cent in 2015-16 and increased to 67.63 per cent in 2016-17, which resulted in foregone revenue of Rs 10,176 crore.
This massive revenue loss has meant that the expansion plans have taken a massive hit as no surplus money was left to be invested in improving the power infrastructure including improvement of the transmission capability.
The lack of enhanced transmission capacity has meant that the PDD had to make an avoidable payment of Rs 543.47 crore towards idle capacity charges and energy charges on deemed generation to two power projects.
The dismal performance of the PDD has been ignored by the previous government making the department a virtual liability and an additional burden on the already fragile financial structure.
This fact is evident from the figures that suggest that J&K suffered a power purchase deficit of Rs 14,871 crore during 2012-17. As against an expenditure of Rs 24,299 crore incurred on power purchase during 2012-17, revenue realisation from sale of power was only Rs 9,428 crore.
This simply means that PDD failed to meet its power requirement and the gap between unrestricted demand and self-generation available to the state which ranged between 77 per cent and 84 per cent.
The PDD has also failed to improve upon the local generation of the existing power plants besides laying special emphasis on setting up new ones given the power4 generation capacity Jammu and Kashmir has that too using its natural water resources.
The PDD has always worked on an escapist mindset by seeking to meet its power requirement through purchase from Central Generating Stations. This is evident from the fact that the PDD has met its power requirement by resorting to 76 percent power imports to meet its requirement.
KV Network
