The performance ratings of state power sector valued and prepared by Icra& Crisil was announced recently with unprecedented tom-toming. A function was also organized by Ministry of power at Imperial Hotel, Delhi to honor and to distribute prizes to the 1^st ,2^nd and 3^rd rank holders by not less than the Hon. Power Minister Sri.Susil Kumar Shinde. Among other things he proclaimed in the function that the rank holders will be prized with cores of rupees in future. This ranking will be the basis of future fiscal allocations including budgetary support and incentive from APDRP. Shinde cautioned in the speech. This type of performance rating evaluation is also going to be a tool in the hands of the central government in future to tame the revolted state governments if any and to bring them in line with the neo-liberal policies.

Parameters for evaluation

It can be well learned by going thro’ the parameters used and weightages given that the entire performance rating model is designed to promote the neo-liberal policies including unbundling of State Electricity Boards and it’s privatisation. Eying this, 45.25% of the marks are set apart for external factors of power utility including historical parameters such as (1)state government related, (2)regulatory process, (3)sustainability of revenue model and (4)creation of a competitive environment. Only 54.75% of the marks are earmarked for internal factors of power utility/ EB such as (1)technical performance (business risk analysis)(2)financial performance ( financial risk analysis)(3)other aspects related to IT , not related to IT and business plan(4) progress in achieving commercial viability. So to evaluate the actual performance of state electricity Board/ state power sector, only the marks awarded to the internal factors need be taken into account. It can be very well pointed that marks are distributed for internal factors too with an intension to cover up the lacunae of those states, which had unbundled and privatized the power sector. For example, redressal of consumers’ grievance is an important factor as government, consumers and employees are the three stake holders in this industry. But only 1.125 % marks are set apart for this. For gearing level, which involves the total debt and the net worth after adjustment, only 1.875% of marks are allotted. The evaluation criteria of financial performance hides the support from the state government in the form of structural adjustment support, transition support etc. These factors are included in the government related parameters as positive aspects and 2.625%, 1.5% of marks are allocated respectively. The burden of all the state governments combined together towards subsidy to power sector increased from 10400 Cr. to 11000 Cr. of rupees during the last fiscal year contrary to the propagandists of neo-liberal policies.

Internal factors de-husked

States which acquired the first five ranks under deferent aspects of Internal factors in the ratings of Icra & Crisil are given below:

1. AP

2. Gujarat - bundled entity during the period of evaluation

3. Delhi

4. Maharastra - bundled entity during the period of evaluation

5. Karnataka

· Commercial viability

1. Goa - bundled entity

2. Tripura - bundled entity

3. West Bengal(WB) - bundled entity

4. Sikkim - bundled entity

5. Maharastra - bundled entity during the period of evaluation

First ten states in the ratings of technical and financial performance

Inference on the rating of internal factors

Only performance up to December 2005 is taken into account for evaluation. From the above-sorted tabulations it is crystal clear that the unbundling process has no bearing on the improvement of technical and financial performance of power sector. On the contrary if we look at the ranks obtained for states, which were leading in the imperialist driven power sector reforms, we can visualise their pathetic performance. Even after getting a lot of financial support from the state government in the form of upfront subsidy, support to restructuring, transitional support etc these states could not come above the bundled and public sector entities. There ranks out of the 29 states, in the ratings of internal factors are given below:

Orissa and Delhi were two states where distribution has privatized. Orissa ranks 17^th and Delhi ranks 6^th in the technical performance of distribution. Ranks from 1^st to 4^th goes to bundled entities as shown above.

AP, Gujarat and Delhi

Icra & Crisil ranked AP, Gujarat & Delhi as 1^st, 2nd and 3^rd respectively considering the internal and external factors. Delhi’s rank raised eyebrows of both Delhits and power sector watchers. Frequent and prolonged interruptions, increasing bribery in the privatized distribution, uncontrolled theft of electricity are in alarming proportions at capital city which the consumers are well aware of .AT&C loss is still at the height of 48.1%. The cumulative tariff hike between 2002 and 2006 is 57.16% and the billing impact is an increase of 97.2% when compared to 2000.Subsidy provided by the state government during the last four years reached 3452 Cr., still leaving aside a revenue gap of 320 Cr. in the latest tariff order. Out of the total of 1700.27 Cr of rupees as outstanding dues of power utilities in Northern zone as on 31-3-2006, 1607Cr. of rupees belongs to Delhi power sector. So only the magic wand of Icra &Crisil in the form of evaluation criteria can bring Delhi to such and envying position.

APSEB was one of the best Electricity Boards in the country right from the period of Tata Rao, the pioneer in the field. It was continuing as a very good EB while it was unbundling in 1999. Between 1990 and 1994, APSEB was minting profit with out subsidy. The load curve of the system is healthy to contribute bettering financial performance. But during the period under evaluation, the states’ exchequer was forced to release nearly 1500 Cr. as subsidy to power sector. No one can find any contribution of unbundling in the rank obtained to Andhra.

Similar to AP GSEB also was a healthy EB. Its load curve is almost flat which helps a lot in the better technical and financial performance. During the period under evaluation, GSEB was a single bundled entity. Even after re-structuring all the companies are functioning under the umbrella of GSEB. So there is no influence of power sector reforms such as unbundling in the rank achieved by Gujarat in the ratings.