By Ranjit Devraj
NEW DELHI, Jun 18 2002 (IPS)

For years, the Indian capital’s state-run power utility suspected that a smelter in a dense jungle of residents and industrial units here, called the Dilshad Garden area, was stealing unusually large amounts of electricity.

Not that the theft of electricity was something earth-shaking in itself because here, it does not raise too many eyebrows. Every section of society is involved — from slum dwellers who simply cannot pay to owners of mansions in posh residential areas and industrial units who have perfected techniques to pilfer electricity.

But the two Gupta brothers who owned the smelter in Dilshad Garden were a class apart. When official raided their smelter May 31, investigators of the Delhi Vidyut (electricity) Board had to get past closed-circuit television systems and goons trained to discourage official-looking types from looking too hard at their premises.

“We have registered cases against the Guptas and have slapped a penalty of 200,000 dollars on them based on a conservative estimate of the power they have been pilfering,” said Debasis Bagchi, who heads the enforcement branch of the utility.

Bagchi admitted that there was no way that the 715 kilowatts per hour of power that the Guptas were stealing, apparently for years, could have been done without the connivance of the board’s officials. “We are investigating the matter,” he said.

Most people would agree that given the unacceptably high 60 percent transmission and distribution (T&D) losses in the national capital, with all its security paraphernalia, what the enforcement branch did was too little and too late.

It certainly was too late because May 31 was the last day that the board was in control over electricity distribution. On Jun. 1, unable to control mounting incidence of theft for lack of political will, the utility finally handed over control of to two reputed private companies, Bombay Suburban Electricity Supply (BSES) and Tata Power.

What is happening in Delhi is part of an ambitious plan drawn up by Union Power Minister Suresh Prabhu to clean up transmission and distribution losses across the country, which in his estimate is costing the exchequer a massive four billion dollars annually.

Little wonder that Board engineers joke that T&D actually stands for ‘theft and dacoity’.

A successful, mild-mannered chartered accountant before he entered politics, Prabhu’s strategy is to create centres of excellence across the country, including Delhi, in which power distribution would be closely and continually monitored and accounted for using software from globally known Indian firms like Infosys and Tata Consultancy Services (TCS).

“The idea is to get in what I would call ‘total energy audit’,” he said.

This has made Prabhu unpopular among those who have benefited for years from a system of total — some would say criminal — unaccountability that bodies starting with the World Bank have been trying to address for years with little success until now.

When socialist India embarked on an ambitious plan of structural reforms 10 years ago, it started with the badly ailing power sector. Blame was quickly laid on agricultural subsidies and irrational power tariffs, but no one dared or cared to look at what was glaringly the worst problem –plain old theft.

It was left to non-government organisation (NGOs) like PRAYAS, famous for its exposes of Enron Corporation’s controversial unit at Dabhol in western Maharashtra state, to draw attention to the fact that within the domain of power theft, the worst offenders were not domestic consumers and farmers that draw power from low-tension lines but large industrial units.

Based on a study of four states — Maharashtra, northern Haryana and southern Andhra Pradesh and Karnataka — PRAYAS found that real losses in revenue were attributable to mega-industrial units which draw power from high tension and extra high tension lines.

According to PRAYAS, since the high-tension and extra high-tension sectors accounted for more than 50 percent of revenues in each of the four states studied, even small commercial losses in these sectors translated into large revenue losses.

Given that engineers conducting energy audits on large industrial units have regularly come across magnetic and even sophisticated electronic devices to tamper with meters, PRAYAS has called for audits that closely monitor every stage — from generation to distribution through high tension to low tension circuits.

The Paris-based International Energy Agency (IEA), which released in April a study ‘Electricity in India – Providing Power for the Millions’, has warned that the power situation in the country has reached a “critical stage”.

It identified the central issue as one of “ensuring that power utilities can earn a fair return on investment” and commented that the utilities in the states were on the verge of bankruptcy simply because of their inability to collect revenue.

The IEA also noted: “Politicians often interfere in the management of power utilities, hindering efforts to curb power thefts”. On the other hand, “consumers who are used to low prices and populist politicians resist change.”

In Delhi, where private companies will formally take control over distribution from Jul. 1, powerful lobbies led by the ruling Bharatiya Janata Party (BJP) that draws support from small and not always legal businesses has already begun to scream “corruption” in the privatisation process.

Undaunted, the private companies are guaranteeing steady supplies of quality and an end to the frequent equipment-destroying power outages that Delhi residents have resigned themselves to. And all without having to pay higher tariffs, since the companies are confident of collecting their dues.

Said Adi Engineer, chief of Tata Power: “We are going to ensure that electricity bills are delivered on time and that consumers pay up as a first priority.”

A petition by the Bhartiya Mazdoor Sangh (Indian Worker’s Union), affiliated to the BJP, challenged the privatisation in a public-interest litigation filed in the Delhi High Court. The court declined to stay the deal but admitted the petition for further hearing.

“This is a clear case of interested politicians siding with the power thieves,” said Ajay Maken, Delhi state power minister.

Moves are also afoot to scuttle plans by Maken to bring in stricter legislation against power theft, which the private power companies want as part of the deal.

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