Cos like Mahagenco are already audited by CAG: Pramod Deo

Below is the verbatim transcript of Pramod Deo's interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.

Latha: What are your comments on the allegations that Mahagenco could have lifted much more coal from Coal India but did not do so and actually produced less power than its capacity allowed it to, is that a fair charge?

A: We already have the electricity regulatory commission. We have a Maharashtra Electricity Regulatory Commission (MERC), which goes into these issues. When these allegations are made basically what we are saying is that we have no faith in electricity act and the regulator. I would not defend that regulators are performing their jobs to the capacity they need to but there is always scope for improvement. So when you make these allegations, what you are saying is that you want to bring in somebody outsider. This is not a competent authority to giving judgement on this but there is no need for electricity law. You could just say that the Comptroller and Auditor General (CAG) will do.

Another interesting thing here is that all the Maharashtra State Electricity Distribution Company Limited (MSEDCL), Maharashtra State Power Generation Company Limited (MahaGenCo) are audited by CAG. So CAG audit is already there within these government companies. Then the point you are making about the Aggregate Technical and Commercial (AT&C) losses, that is the main issue.

Maharashtra now has completed the project of separation of agriculture figures. Once you do that, you will know how much supply goes to agriculture and then you get a very correct estimate of the distribution losses. Once you had distribution losses, the question is how do you bring them down because if we were to compare Mumbai with the rest of Maharashtra, Mumbai’s losses are in the region of 11-12 percent whereas we are looking at figures which are again guessed estimates which are more than 30 percent today. Actual figure we don’t know but once the agriculture figures are separated, we will have a very correct estimate of that. That is the case. Now the difficulty comes is that these are government companies and there is a certain limit given which improvement is not possible.

Latha: That is the point. if the MahaGenCo is not generating as much power as it is capable of, somebody has to take the flak, either - it need not necessarily be that the AAP is blaming the MERC but the fact that they were producing below capacity and not even taking subsidized coal that was available to them is clearly a fair charge, would you not say at least the Maharashtra government has to take the flak for it?

A: No, these are allegations, which are heard in the public hearing, which the Maharashtra Electricity and when the tariff of MahaGenCo is determined, all these are discussed. In fact, they have active consumer organization, you have Prayas from the Gram Panchayat. So it is not that you don’t have people who don’t understand electricity.