Power Distribution: PPP the way forward for revival of discoms


Power Distribution: PPP the way forward for revival of discoms

Power distribution in India is by and large a state-owned monopoly and remains the weakest link in the power sector value chain despite a number of measures taken by the government to address issues over the years. The CRISIL InfraInvex indicates as much in the weak category, with a score of 5.6 (on a scale of 10, where 1 indicates least attractiveness) for the sector in October, 2018.

The Ujwal Discom Assurance Yojana (UDAY), a key reform measure focused on a turnaround through cost reduction and improvement in operational efficiency, has yielded some good results directionally on operational and financial fronts. Between fiscals 2012 and 2019, the aggregate technical and commercial (AT&C) losses have been reduced from ~27% to ~20% and cost recovery has improved, with the gap between the average cost of supply (ACS) and average revenue realised (ARR) down to `0.34/unit from `0.76/unit earlier. Read More

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