Corruption rules Uttar Pradesh State Electricity Board, losses highest in India

Workers demonstrating: Strong unions frustrate reformElectricity boards all over the country seem to generate more controversy than power. Despite the stiff competition the Uttar Pradesh State Electricity Board (UPSEB) stands out easily as the worst of a bad lot. Hopelessly corrupt, its losses are the highest in the country, its rates the second highest and its track record over the last 20 years is, to put it mildly, dismal.Barring two years, the UPSEB has been in the red throughout its 20-year life. Cumulative losses escalated to Rs 157 crore in 1979 from Rs 45 crore in 1970, a shocking state of affairs for an organisation with capital employed at over Rs 2,000 crore, the second highest in any public sector undertaking. In spite of 100,000 employees and a daily expenditure of Rs 1.20 crore, UPSEB operates at less than 40 per cent of its installed capacity, well below the national average of 45 per cent. It generates only 1,400 MW of electricity against an installed capacity of over 3,100 MW, and its distribution network covers only 40 per cent of Uttar Pradesh's rural population against the national average of 57 per cent covered by the other 20 electricity boards. Its future growth seems to be hamstrung because it doesn't even have the money to pay annual interest of over Rs 25 crore on loans at over Rs 2,136 crore which it has borrowed from various government and private financial institutions since it was formed in 1959.Corruption: A leading industrialist of western Uttar Pradesh says: "A voracious coterie of middlemen, trade union leaders, politicians, engineers and contractors have played havoc with the electricity board." An opposition MLA adds: "It is a golden goose which lays golden eggs." The image is not unconvincing. According to a senior official of the Uttar Pradesh Government, corruption charges against 98 officials of the UPSEB were substantiated in 1979. These include six superintendent engineers, 18 executive engineers. 21 assistant engineers, 26 junior engineers and 27 others.Clnosrci transformers in the open: Adding to the losscsUp to November 15, 1980, there were prima facie cases against 101 employees including two superintendent engineers and 14 executive engineers, UPSEB authorities deny any knowledge about the involvement of their senior officials in corruption cases but one senior official did seem to contradict this when he admitted that "there are only six cases in which the amounts of irregularities are more than Rs 10 lakh. Out of these six cases one officer has been dismissed from service and criminal prosecution has been permitted against two other officers."While investigations are going on against several UPSEB employees, the chief minister has ordered a special investigation into excess consumption of 40,000 kilolitres (11 per cent of total consumption) of furnace oil last year despite a fall in power generation. Over Rs 10 crore is suspected to have been misappropriated.Leniency: Detailed investigations also reveal that the Board has not even taken action against over 120 employees against whom charges have been substantiated. Most of them are charged with embezzlement of several lakh rupees each. As usual only the comparatively small fry have been identified and charged. The big sharks have either escaped the law or have even been "exonerated" by the UPSEB for their "minor" supervisory lapse. The only action taken against an executive engineer who was charged with irregularities worth over Rs 60 lakh was the withholding of two increments. And even this penalty was later withdrawn.Another senior engineer, who was indicted by an enquiry commission, has been promoted twice in the last two years and is now in charge of a new Rs 350-crore power project. The UPSEB almost seems to be organised to encourage corruption. There is a willful absence of purchase and inventory controls that allows for all kinds of irregularities. Says Chief Minister Vishwanath Pratap Singh, "I am aware of this delicate problem. The UPSEB does not have proper inventory control systems and established norms of purchases."Star Power Minister Brahm Dutt and UPSEB Chairman Mittal: InactivitySharp Practices: In the absence of procedures irregularities are common in the purchase of distribution transformers. The latest report of the Comptroller and Auditor General of India says: "In some cases supplies of transformers were accepted without exercising any routine tests while in some cases inspection and testing of the transformers supplied by the various firms were waived on the ground that the Board's inspection wing was not adequately staffed." The report adds that 22,525 transformers were accepted a few years ago without conducting impulse and temperature tests."In a similar vein a vigilance officer says: "We estimate, UPSEB loses Rs 5 crore every year on the purchases of transformers alone." A UPSEB official said that more than Rs 45 crore is spent on transformers annually half of which are either stolen or damaged every year. And if UPSEB contracts are anything to go by, it costs more to repair an old transformer than it does to buy a new one. For example two firms were awarded contracts to repair power transformers at the cost of Rs 1.45 lakh while "a new one was bought by the Board at Rs 1.30 lakh. Despite these examples the UPSEB has no check on the purchase of transformers. UPSEB chief Vishnu Chand Mittal admits there are no proper records about the number of transformers purchased, damaged and under repair in the last 10 years. He says: "It is very difficult to supply this information. We don't have a regular monitoring system." But some of the UPSEB officials admit that every second distribution transformer purchased by it every year is either stolen or damaged. Unused transformers worth over Rs 20 crore are lying in the open in the various divisional stores of the Board.Unchecked Losses: Another major source of revenue leakage is the distribution and transmission energy losses. One out of every five units of electricity generated by the UPSEB is lost during the transmission and distribution compared with 18 per cent for the whole country. During 1978-79, of the 9, 844 million units of electricity generated. 1, 815 million units worth Rs 40 crore were lost in transmission and distribution. Power experts say these losses are caused by unauthorised power connections and energy thefts which are committed with the connivance of UPSEB employees.Over 4,000 cases of energy thefts are pending in the courts. During 1979, over 2,000 cases of energy thefts were detected by the UPSEB's vigilance department. Over a dozen cases involving unauthorised electric supply to the residences of senior political leaders and officials were also brought to the notice of the state Government. In some cases, meter readings were recorded at less than the actual consumption. In 1979, the board also detected 6,582 illegal connections, 1,999 cases of energy thefts and 1, 421 cases of excess load. This adds up to a revenue loss of over Rs 1.05 crore to the UPSEB. This year the losses detected till October are even higher. And this is most probably only a fraction of the actual losses. Since 50 percent of the electricity is consumed by the industrial sector, loss of energy due to distribution faults is likely to be minimal because bulk consumers take power on their own grid.Blocked Solutions: Politics prevents any effective solution to the UPSEB's problems. Its 3, 000 engineers oppose the state Government's proposal to induct senior IAS officers into the engineer-dominated electricity Board. State government officials counter that many of the problems affecting the UPSEB could be solved if somebody from outside was brought in.While the state Government is trying to get the UPSEB under control the powerful Uttar Pradesh Vidyut Abhiyanta Sangh (UPVAS) has started flexing its muscles to frustrate any attempts to bifurcate the UPSEB. Says Shailendra Dubey, fiery general secretary of UPVAS. "the IAS lobby in the state has chalked out a conspiracy to abolish the UPSEB. No doubt the entire Board is inefficient and should be replaced but we will not tolerate any attempts to kill the Board." Since some of the top Congress (I) leaders have also lent their support to the engineers. Chief Minister Singh has not been able to launch a separate power generation company. According to the state Government a separate generation company would not only plug the revenue leakages but also put an end to trade union activities.Union Activities: Vigilance sources affirm that the engineers' organisation is the most powerful and wealthy trade union in the state. It has a bank balance of over Rs 10 lakh and a majority of its members own houses in more than two cities in benami names. During the last three years it has organised three major strikes in which engineers up to the level of superintendent engineers participated. During one of their strikes, when over a hundred engineers courted arrest, police recovered Rs 55,000 from them. And though the court awarded them one month's punishment, none of them was either dismissed from service or even faced any disciplinary action.Nevertheless, while the state Government has not bothered to curb the objectionable activities of the engineers who are likely to go on strike in support of their demands, it has not hesitated to sack live chairmen and over a dozen members during the last three years. And a seemingly confident chief minister and his power minister are determined to steer the UPSEB out of the woods. Says state Power Minister Brahm Dutt: "We do want the co-operation of engineers but that doesn't mean we will tolerate corrupt elements. We will give them exemplary punishment." But for all this talk it seems unlikely that heads will roll. With the financial and political clout which the employees wield it is more likely that at the most some persons long enjoying safe jobs will be shunted to less salubrious postings.Published By: AtMigration Published On: Nov 29, 2013 09:51 IST--- ENDS ---

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Corruption rules Uttar Pradesh State Electricity Board, losses highest in India

Electricity boards all over the country seem to generate more controversy than power. Despite the stiff competition the Uttar Pradesh State Electricity Board stands out easily as the worst of a bad lot.

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