(This is the third part of a series on issues plaguing the Kerala State Electricity Board Ltd.
Part-I: How powerful trade unions hold sway over the KSEB
Part-II: Brash unions want a finger in every KSEB pie and how leaders browbeat authorities)
The Kerala State Electricity Board Ltd has landed in a huge debt trap. Often it raises revenue by hiking power tariff instead of cutting down on wasteful expenses, exploiting potential alternate revenue sources and improving efficiency. If the KSEB doesn't take the writing on the wall seriously, it will fit the bill for privatisation which could end for ever the pernicious influence of labour unions. As things stand now this is the last chance for revival for the public sector undertaking of the Kerala government. The following aspects throw light on what all have made the state utility a white elephant.
High power purchase cost
Kerala is one of three states which spends maximum money for the distribution of one unit of power. Of every Re 1 spent by the KSEB, 65 paise is used for buying power from outside. Only 25 percent of the electricity needed for Kerala is produced domestically. Electricity to the tune of Rs 9,000 crore is bought from outside on a yearly basis. The cost for one unit of power goes up to Rs 4 in such purchases. We would get solar power for Rs 2 per unit during day time when there is less consumption. Such options should be explored. The KSEB should cancel costly power purchase agreements and instead sign short-term agreements that offer low-cost power. Even a one percent reduction from the Rs 9,000 spending for power purchase leads to a good saving for the KSEB.
High operational cost
Of every Re 1 spent by the KSEB, 30 paise is accounted for expenses such as salary. As many as 33,000 employees are working under the Board. Of this, the appointment of 6,000 employees was not approved by the Electricity Regulatory Commission. So, the KSEB adjusts their salary in the accumulated loss. It is not practically possible to dismiss employees in order to offset losses. But new appointments can be avoided in posts where manpower is not needed after the modernisation drive. Once the smart meter system is implemented, around 5,000 posts can be phased out.
With rapid changes in technology, there are significant changes in electricity distribution methods. The KSEB no longer needs field offices and collection centres. Many existing posts can be scrapped if the online transaction methods get further spread. If the KSEB continues with its appointment spree, its operating cost and consumers power bill will continue to soar.
Small-scale hydroelectric projects in limbo
The work on more than 100 small-scale hydroelectric projects have either begun or almost reached halfway through in the State. These projects have the capacity to produce 790 megawatts of power. Power deficit can be solved to a great extent if these projects, which do not even require the construction of dams, are completed on time. The 60-MW Pallivasal extension project and the 1-MW Thirunelli project are all in the pipeline. Once all these projects are completed, Kerala can produce 18 million units of power.
Underground cabling delayed
Many other states are now working on laying underground cables by replacing the old electric lines.
The installation of underground cables would help to curb power loss during distribution. But Kerala is lagging behind other states in initiating the work on underground cables. The problem is that the state doesn't have money to spend on this count. But, moves are afoot to start the work on it with an assistance of Rs 4,000 crore from the central government.
Hydel tourism projects have become a sham
The hydel tourism projects are revenue-sharing models in which the KSEB's land near dam sites is given for lease to cooperative societies and private parties. The programme was launched when Pinarayi Vijayan was the electricity minister during the 1996-99 period. Both the successive LDF and the UDF governments failed to monitor such projects properly. At first, the land was given to private parties for running such projects. Later, the government started giving land to cooperative societies on lease. Many of such land deals led to huge controversy. A total of 80 acres have been already given for such projects. Though societies and private parties made a profit out of it, not a single paise has come to the KSEB's kitty so far. The lack of transparency has led to such a situation. Astonishing enough, only the official records for granting four acres of land to the hydel projects are with the KSEB. This is a serious lapse. The KSEB will have to explain before the Regulatory Commission its action of giving the Revenue Department's land for lease to societies and private parties.
Electric posts: another potential revenue source
The KSEB can make money by giving electric posts for operating micro-internet services and launching power charging centres for electric vehicles. There are reports that the KSEB is holding talks with various telecom companies. The public wants transparency in all deals. The aim of such innovative projects should not be limited alone to promoting individuals and cooperative societies supporting the ruling parties.
Daughter of ex-chairman recounts his eventful tenure
Usha Achuthan, daughter of former KSEB chairman N Kaleeswaran, who is now settled in Thoothukudi in Tamil Nadu along with her husband, became very emotional when she came to know that many people still have fond memories about her father. "A friend of mine sent me through WhatsApp the first part of the series on KSEB published in Manorama. Though I am a Tamilian, I know Malayalam as I had studied in Thiruvananthapuram. It was on January 1 1991 that my father relinquished the chairmanship. After one-and-a-half months, he died on February 15.
My 85-year-old mother Lalitha and my younger brother Narayanaswamy are now residing at our old house in Vrindavan Gardens, near Vydyuthi Bhavan. On my father's death anniversary, we had a family get-together there. We saw some flags in front of the Vydyuthi Bhavan and an agitation going on there. I heard people saying that the employees were agitating against the incumbent chairman. Then I recollected suddenly how some union leaders used to make things difficult for my father.
I still remember one episode that happened during those times. The then Chief Secretary S Padma Kumar came to our house one day. He then said, "it is good for the KSEB to have a chairman like Kaleeswaran. But it will be bad for Kaleeswaran's health." What he had said came cent per cent true later. My father suffered a heart attack. When I visited him at the ICU, the first thing he asked me was whether she had any idea about the water level in the Idukki Dam. Once a contractor supplying electric cables came to meet him. The father told him bluntly that since he quoted higher prices for cables, he would not get the work. Then the contractor suddenly kept the keys of a brand-new costly car on the table. Then, he requested the father to take this small present and then favour him. Seething with anger, my father got up from his chair after pushing it back. The chair fell down with a big noise. Taken aback, the contractor immediately fled from the scene. That was my father's nature.
My mother and sister living in Coimbatore and my brother settled in Atlanta in the US read the Manorama report online. We all read it with tearful eyes as our father was such an upright officer who sincerely worked for reviving the fortunes of the KSEB."