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Overhauling power infrastructure

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The demand for power is steadily rising, and no doubt the generation capacity is chasing it, or, as of now, generation and thus distribution or supply in Jammu and Kashmir are not keeping up. As a result, the UT must purchase power, which is no easy task given that funds must be managed and power must be purchased on a deferred payment basis. This unfortunate situation exists for a variety of reasons; listing them all would take too much time and space, but addressing a couple of them would suffice. Only a portion of the potential for hydroelectric power generation in Jammu and Kashmir has been harnessed, as the area requires massive investments if more run-of-the-river power plants are to be built. On the other hand, it is critical to know whether whatever capacity is generated reaches the ultimate destination of supply and use, such as a household, a commercial establishment, and so on. There are wastages in the transmission system, but they are much higher in Jammu and Kashmir than the national average of roughly 22%. That is due to poor infrastructure, and if we can reduce transmission losses, we will have a much larger supply of electricity. As a result, in addition to generating more power, it is necessary to improve infrastructure to the point of refurbishing and overhauling it.

Perhaps that factor should always be taken into account at the highest levels of planning in respect of Jammu and Kashmir, for which the central government has sanctioned an amount of Rs.12000 crore or Rs.6000 crore for both Jammu division and Kashmir valley under the Revamped Distribution Sector Scheme (RDSS). The funds can thus be used to improve power distribution infrastructure in both urban and rural areas, with the overall goal of ensuring “regular” electricity supply to consumers. The scheme, for which a package of Rs.12000 crore has been approved, aims to reduce AT&C losses by improving operational efficiency and financial sustainability in power departments. In fact, AT & C losses are largely responsible for disequilibrium in the power equations because they are a combination of energy losses, such as power theft and inefficiency in the billing procedure, and commercial losses, such as default in power bill payment and inefficiency of the concerned department in the collection process of the amount due. It goes without saying that the power distribution and management system, particularly the PDD, has a lot of room for improvement in all of these areas. The growing revenue gap in terms of power cost realisation and regional disparities must be addressed solely on a commercial and professional basis.

While we continue to criticise the PDD for not taking strict measures to collect power revenue that is due to it, particularly from “bigwigs” who owe thousands, if not hundreds of thousands of rupees, pressures exerted on it on the other hand from “influential” persons, coupled with increased political interference, as well as mooting a concessional framework, etc., upsets the applecart of the roadmap towards realisation. As a result, revenue gaps and losses are growing.

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To be more specific, any revamping package or periodic bailing out of the PDD by the central government is no solution unless we treat purchasing power (getting its supply up to the plug) like any other commodity in the market (only against cash). Yes, large-scale investments and joint ventures can be considered for large-scale power generation projects, but while the focus should be on generating more power and improving distribution, it is critical that 100% recoveries be achieved so that funds for improving power infrastructure can be managed from the UT’s own resources. Indeed, the central government has reportedly asked the UT government to increase revenue generation, despite the fact that a proposal had already been sent by and for assisting the UT government under the RDSS. It goes without saying, however, that private investment and management in power distribution should be pursued in order to limit power outages, reduce technical and commercial losses, and ensure coverage expansion. The PPP model can perform better. The UT of Jammu and Kashmir is fortunate in that it is classified as one of the “Special Category States,” which should be viewed as an opportunity to maximise the assistance received from the Central Government, such as under the scheme in question. It should not, however, be interpreted to mean basking in protectionism in the strict economic sense, which is frequently the result of complacency and even carelessness.

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