Gujarat Electricity Board

1. Gujarat Electricity Board BEST PRACTICES FOLLOWED FOR REDUCING CASH LOSSES

2. Nature of the problem before current process was introduced • Deficit during the year 2000-01 – Rs. 4268 crores • No awareness amongst the staff for improving revenue. • Emphasis on electrification, releasing connection, maintaining lines and providing power supply. • Recovery of revenue considered as secondary function.

3. OPERATIONAL AND FUNCTIONAL IMPACT OF THE PROBLEM •     Minimum revenue growth. •      Increasing arrears. • Increase in cash losses.

4. Measures to achieve Cash loss reduction The initiatives are in three main areas: • Revenue Improvement Measures • Efficiency Improvements • Expenditure Controls

5. Revenue Improvement Measures • Familiarization of revenue matters through monthly meetings at Zonal level attended by C.E. & Members of the Board • Appointment of feeder managers • Metering of all the feeders • Intensified checking of theft prone areas

6. Monthly Meeting focus on : • Improvement in revenue assessment • Collection efficiency • Reduction in debit arrears • Intensified disconnection drives • Sub division wise revenue performance parameters • Feeder wise T&D losses monitoring in terms of MUs lost & financial implication thereof • Targets fixed for the succeeding month. • D.E.s and Jr. Engineers held responsible for not achieving the targets.

7. Revenue Improvement Measures • Release of new connections (Nos.)

8. Revenue Improvement Measures • Line losses reduction

9. Revenue Improvement Measures • Achievements of Intensive Checking • Number of I/C Squads HT – 11; LT -63 • Additional 6 Nos. of Police Personnel are provided -1 at Head Office, 5 at Zonal Offices • Targets and Achievements during last four years (Detection of Theft & Malpractice) Sr Years Target Achievement No. (Rs.Crores) (Rs.Crores) • 1999-2000 100 135 • 2000-2001 200 168 • 2001-2002 215 191 • 2002-2003 250 229 • 2003-2004 270 224 • GEB Police Stations are sanctioned at Surat/ Baroda/ Mehsana/ Rajkot/ Bhavnagar

10. Revenue Improvement Measures • One Time Settlement Scheme i.e. "Samadhan Yojana" to clear old dues. 28793 Consumers availed benefit. • Scheme for regularising unauthorised extension of load by residential and commercial consumers without any penal action. • Cheque drop system for bills payment introduced. • Advance payment facility. Interest @ 8% pm minimum advance payment of Rs.2000/- • Payment through Internet introduced in Baroda City.

11. Revenue Improvement Measures • Outside agencies appointed for Bills collection. • Bill Collection on holidays introduced. • Release of new Industrial Connections. • Scheme of bulk discount to the consumers of Industrial Estate. • Incentive Scheme introduced for incremental consumption - HT Consumers. • Scheme for Co-operative Societies for single power supply. • Bill Collection Work entrusted to Postal Department throughout the State.

12. Revenue Improvement Measures • Reduction in DPC from 30/24 % to 18/15% from April,02 • Voluntary disclosure scheme for Residential, Agricultural & Industrial consumers upto 5HP. • Incentive to HT consumers for incremental increase in consumption. • Bill collection by retired employees at cash collection windows of GEB • Increase in bill collection commission from Rs. 2 to Rs. 5

13. Revenue Improvement Measures • Introduction of rationalized Samadhan Yojana • For regular and disconnected consumers. • For settlement of theft bills. • Rationalization of Reconnection Scheme of industrial PDC connections. • Voluntary Disclosure Scheme for: • Residential consumers and non-consumers. • Agriculture consumers and non-consumers.

14. Efficiency Improvement Measures • Reduction in specific Fuel /Oil consumption Year ML Per KWH 1999-2000 3.37 2000-2001 2.03 2001-2002 1.01 2002-2003 0.94 2003-2004 1.94 • Reduction in Auxiliary Consumption for last 5 years YearAuxiliary Consumption% 1999-2000 9.71 2000-2001 9.62 2001-2002 9.37 2002-2003 9.40 2003-2004 9.71

15. Activities carried out for reduction of Commercial Losses • Providing Metal Meter Boxes and sealing of consumers’ installations • Replacement of non-working / faulty meters. • Intensifying installation checking • Scheme for regularizing non consumer indulged in direct theft. • Anti theft Bill approved in Assembly, on its implementation, theft of energy will be reduced.

16. Activities carried out for reduction of Commercial Losses (in Lakhs)

17. Activities carried out for reduction of Commercial Losses

18. Cost control Measures Electricity Board incures expenditure mainly on five Heads viz. • Power purchase • Generation • Interest • Salary • O&M

19. Cost control Measures Power Purchase: • Merit order drawal. • Rationalization of power purchase. • Power position management under ABT. • Reduction in fixed cost of IPPs negotiated. GENERATION COST:  • Optimum fuel mix • Reduction in specific oil consumption • Reduction in auxiliary power consumption

20. Cost control Measures EMPLOYEE’S COST: • GEB implemented 20% cut on manpower on the Government lines. • Redeployment of the staff. O&M COST: • O&M cost has been reduced.

21. Sr. No. SEBs 2001-02 1 Andhra Pradesh 1.61 2 Gujarat 1.70 3 Haryana 2.08 4 Karnataka SEB 2.17 5 Madhya Pradesh 3.48 6 Maharashtra 4.20 National Average 2.55 Cost control Measures • % Share of O&M in Total Cost. Source : Annual Report 01-02 of Planning Commission

22. Sr. No. SEBs 2001-02 1 Andhra Pradesh 7.07 2 Gujarat 9.79 3 Haryana 12.55 4 Karnataka SEB 12.58 5 Madhya Pradesh 14.00 6 Maharashtra 12.03 National Average 12.70 Cost control Measures • % Share of Estt./Admn. in Total Cost Source : Annual Report 01-02 of Planning Commission

23. Sr. No. SEBs 2001-02 1 APSEB/APTRANSCO 2.07 2 Gujarat 1.46 3 Haryana 3.29 4 Himachal Pradesh 4.93 5 Karnataka 1.95 6 Madhya Pradesh 3.34 7 Maharashtra 2.37 National Average 2.53 Cost control Measures • Number of Employees per Mkwh of Electricity Sold Source : Annual Report 01-02 of Planning Commission

24. Other Cost control Measures • Creation of costing cell • Cost control and economy in expenditure • Power Stations and O&M In charge made aware of costing

25. Financial Restructuring Measures FINANCIAL COST: • Restructuring of loans at lower rates of interest. • Conversion of cash credit limit from Rupee denomination to foreign currency demand loan at lower rate of interest. • Commission on L/Cs and DPGs reduced. • Restructuring of Bonds at lower rate of interest

26. Saving in interest cost due to financial restructuring measures

27. BENEFITS DERIVED Collection efficiency improvement from 94% in 2000-01 to 99% in 2001-02, 2002-03 & 2003-04 Improvement in cash collection Number of disconnections carried out per month increased to 3.3 lakhs in 2003-04 from the level of 1.90 lakhs in 2000-01

28. THANK YOU

29. BENEFITS DERIVED-2002-03 • Net cash loss reduction of Rs. 652 crores achieved on account of revenue increase. • Other income increased by Rs. 256 crores during the year 2002-03 over the previous year.

30. Cost to Serve, Average Realisation & Gap GAP - Cost vs Realisation

31. Cash loss reduction[ Rs. in Crores]

32. BENEFITS DERIVED Net cash loss reduction of Rs. 1072 crores achieved on account of revenue increase. Other income increased by Rs. 60 crores during the year 2001-02 over the previous year. Rs. 536 crores sanctioned as incentive under GoI’s scheme under which 50% of the cash loss reduction is paid as incentive to SEBs. GEB received 236 crores under the scheme. Reduction in expenses by Rs. 58 crores during the year 2001-02.

33. Cash loss reduction [Rs. in Crores] C:\Documents and Settings\P.M.THANKI\My Documents\Best practices 26-10-04.ppt