Kenya, Ja­maica look­ing at In­dia's pri­va­ti­za­tion model

The Pak Banker - - COMPANIES/BOSS -

In an at­tempt to in­tro­duce elec­tric­ity dis­tri­bu­tion re­forms in their coun­tries, rep­re­sen­ta­tives from Kenyan and Ja­maican gov­ern­ments are look­ing at the ex­pe­ri­ence of the In­dian elec­tric­ity sec­tor, par­tic­u­larly in Delhi.

A team com­pris­ing rep­re­sen­ta­tives from Kenya Energy Reg­u­la­tory Com­mis­sion, Kenya Power and Light­ing Com­pany, Ja­maica Public Ser­vice Com­pany Ltd and Ja­maica So­cial In­vest­ment Fund vis­ited the Delhi Elec­tric­ity Reg­u­la­tory Com­mis­sion (DERC) and dis­tri­bu­tion firms such as Tata Power Delhi Dis­tri­bu­tion Ltd (TPDPL) ear­lier this month.

Three of Delhi power dis­tri­bu­tion com­pa­nies, or dis­coms, were pri­va­tized in July 2002: BSES Ra­jd­hani Power Ltd (BRPL), BSES Ya­muna Power Ltd (BYPL) and TPDPL. The dis­tri­bu­tion firms are joint ven­tures with Delhi Power Co. Ltd, which owns a 49% stake in each of them. The other dis­coms in Delhi are Mil­i­tary En­gi­neer­ing Ser­vices (for Delhi Can­ton­ment) and the New Delhi Mu­nic­i­pal Cor­po­ra­tion. These dis­tri­bu­tion firms have a con­sumer base of around 4.231 mil­lion cus­tomers, with Delhi's power de­mand in the re­gion of around 5,000 megawatts (MW).

"A lot of coun­tries are look­ing at us to un­der­stand how to in­tro­duce elec­tric­ity dis­tri­bu­tion re­forms. This in­cludes the reg­u­la­tory ar­chi­tec­ture. Even a team from Nige­ria had come some time back," said a se­nior DERC of­fi­cial, re­quest­ing anonymity.

A TPDPL ex­ec­u­tive, who also didn't wish to be iden­ti­fied, con­firmed the de­vel­op­ment. Power sec­tor re­forms in Delhi have been a mixed bag, with al­le­ga­tions of dis­coms in­flat­ing their losses. This comes in the back­drop of the pro­posed in­crease in Delhi's elec­tric­ity tar­iffs, with the is­sue tak­ing po­lit­i­cal over­tones. The Aam Aadmi Party came to power in Delhi in Fe­bru­ary on the prom­ise of low­er­ing house­holds' elec­tric­ity bills.

Queries emailed to Kenya Energy Reg­u­la­tory Com­mis­sion, Kenya Power and Light­ing Com­pany, Ja­maica Public Ser­vice Com­pany Ltd and Ja­maica So­cial In­vest­ment Fund weren't im­me­di­ately an­swered.

In a col­umn for Mint last year, Shakti Sinha, Delhi's for­mer power sec­re­tary, wrote, "Some of the key gains from the pri­va­ti­za­tion of dis­tri­bu­tion in the city: ag­gre­gate tech­ni­cal and com­mer­cial losses have come down from around 55% to 15% at present. Load shed­ding has re­duced from 5% to around 0.3%, or from 891 mil­lion units in 2000-01 to 43 mil­lion in 2012-13."

"Pri­va­ti­za­tion has also had a hugely pos­i­tive im­pact on Delhi's public fi­nances, al­low­ing the gov­ern­ment to go on a build­ing splurge of el­e­vated roads, fly­overs, hos­pi­tals, schools, col­leges and univer­si­ties. Ear­lier, the sec­tor was a strain on the gov­ern­ment bud­get, with out­flows of Rs.860 crore in 1998-99, Rs.1,136 crore in 1999-2000 and Rs.1,337 crore in 2000-01," Sinha wrote. In­dia has been of­fer­ing its ex­per­tise for ca­pac­ity build­ing to African coun­tries and else­where.

State-owned Power Grid Corp. of In­dia Ltd (PGCIL) has been scout­ing for op­por­tu­ni­ties in Nige­ria and Kenya for set­ting up trans­mis­sion projects through the public-pri­vate part­ner­ship (PPP) route. As part of its con­sul­tancy as­sign­ments, PGCIL is al­ready in­volved in in­sti­tu­tional de­vel­op­ment in Kenya by train­ing the trans­mis­sion sys­tem engi­neers of Kenya Elec­tric­ity Trans­mis­sion Co. Ltd (Ke­traco).

Also, Ethiopia may re­new a key con­tract awarded to an In­dian con­sor­tium led by PGCIL for man­ag­ing its power sec­tor. Some of the ef­fi­cien­cies brought in by the In­dian con­sor­tium in­clude im­prove­ment in trans­mis­sion sys­tem, fewer black­outs, bet­ter gen­er­a­tion and wider con­sumer base. Ethiopia has had one of the worst records in terms of ac­cess to elec­tric­ity.

For decades, In­dia en­joyed strong ties with Africa, stem­ming from a shared colo­nial past and In­dia's sup­port for in­de­pen­dence move­ments in the con­ti­nent.

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