DESA turns a deaf ear

Financial performance of Dhaka Electric Supply Authority (DESA) has not improved despite an earlier warning that it would be merged back with the Power Development Board (PDB) if it failed to reduce system loss and its arrears with PDB by July this year, sources said.

With its ever-increasing arrears with PDB, now at over Tk. 1800 crore, DESA came under fire in recent months from the Prime Minister, Parliamentary Standing Committee on Energy, Finance Ministry, Energy Ministry, PDB and World Bank-led donors.

Still, DESA's system loss remained almost static at 25-26 per cent for long.

System loss is responsible for a loss of over Tk 350 crore a year in the power sector. About half of the system loss is due to 'theft' of power by consumers in connivance with a section of employees of PDB and DESA, the sources said.

Though DESA authorities took some measures against some meter readers and ledger writers in recent months for their involvement in power pilferage, there has been no significant improvement in the performance.

"In the last six months, the PDB authorities took some measures to improve its performance. DESA has also introduced some measures," said a source in the PDB.

PDB has more than Tk 2500 crore arrears due from DESA and other clients, which is equivalent to its 17 -18 months' billing.

However, some top officials of PDB are also considering a second option. "If DESA continues to perform poorly, it might be converted into a subsidiary of PDB instead of merger. It would be easier to implement this concept," the source added.

DESA is also not serious about paying PDB's monthly bills. Normally, PDB charges a monthly bill of around Tk. 100 crore from DESA for the power sold to it. "But DESA seldom pays more than Tk 50 crore a month. Moreover, It did not pay bills for over three months last year," said the source.

Different types of clients including government offices and industries owe DESA over Tk 1400 crore. "If every thing was in order in DESA, it would have made a profit of over Tk 20 crore a month," the source noted.

PDB continues to issue letters to DESA in "strong language" to improve its performance and pay the arrears by raising its bill collection to over 120 per cent (against the total billing).

The PDB had fixed a target to reduce the system loss to 18-19 per cent from 23 per cent by January and raise the collection-generation ratio to over 100 per cent from last year's 85 peer cent.

But despite serious efforts, PDB's system loss could be reduced by only one per cent and it stood at 22 per cent in December. "However, the collection-generation ratio increased significantly last month," the source said.

Corruption is so deep rooted in DESA that even transfer of some unscrupulous employees has not produced any significant result, he added.

"The root of all evils is the present billing system". To remove it, the authorities are now working on a plan to introduce computerised billing system in the city, he said.

"Already computerised billing has been introduced in PDB which has 10 lakh clients. It has now computerised billing system for over 70,000 clients in Chittagong, Kushtia and Comilla. By the end of December this year, about two lakh clients will be brought under computerised billing system."

In addition, PDB has introduced a number of reform measures to improve its performance. It has converted its six power distribution zones into "Strategic Business Units" under which there are 20 District Circles. All these circles will now work as separate "Cost and Profit Centres", each having separate assets.

Besides, PDB has formed Clients' Service Association at the level of its' 250 Electric Supply Units across the country. Headed by a PDB Resident Engineer, these associations have deputy commissioners and people from thanas as members. The members meet every month and submit their complaints and suggestions to improve PDB's performance.

"All these reform measures have become vital for the existence of PDB. Donors are pressing the government to abolish PDB by separating its components as its overall performance continued to deteriorate over decades," observed a power expert. "By improving PDB's performance and making it a profit earning entity by 2003, PDB wants to prove that the public sector can perform well."