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Mahavitaran faces slowdown blues

Makarand Gadgil in Mumbai | February 02, 2009 10:10 IST

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The ongoing economic slowdown is badly affecting Maharashtra's power distribution utility, Mahavitaran, which has seen its monthly revenue decline by almost Rs 150 crore (Rs 1.5 billion).

This is likely to result in steep rise in tariffs, say officials.

The average monthly collection of Mahavitaran during the current financial year was about Rs 1,700 crore (Rs 17 billion).

However, in January, it would be less by around Rs 150 crore, said a Mahavitran official.

Lower demand from industrial and commercial sectors has come at a time Mahavitaran's power purchase bill has seen a sharp rise.

The reduction in demand means the discom's ability to cover the losses it makes from supplies to residential and agriculture sectors has been hit seriously, says the official.

The fall in demand is seen mostly in steel, automobile and auto ancillary industries. The demand from steel and automobile sectors had seen a drop of almost 50 per cent, he said.

A little over 40 per cent of the total demand comes from the industrial sector. However, the slowdown has led the demand from this sector to fall 5-7 per cent.

This, he said, meant a revenue loss to the tune of almost 12 per cent. The state is facing power shortage to the tune of 4,500-5,000 MW.

"The reduction in demand from the industrial sector helps us divert some power to other sectors. However, as the reduction in demand is not enough to plug this gap, we have to buy power from wherever it is available," he said. The power available on a merchant basis is as costly as Rs 7-9 per unit.

With summer approaching, the rates are expected to firm up. "Our power purchase bill, which was about Rs 1,322 crore (Rs 13.22 billion) in April last year, rose to Rs 1,723 crore (Rs 17.23 billion) in December," said the official.

"Considering all these factors,  it seems we have little choice but to ask for a steep tariff hike when we approach the state power regulator for annual tariff revision in a couple of weeks," he said.

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