P R I M E   C O N C E R N

POWER PRICE
Punjab cuts generation, you pay extra
By Ruchika M. Khanna
Punjab has been deliberately reducing generation at its power plants while purchasing expensive power from outside the state. The consumer ends up paying for the increased cost.
Shortage of power is not the only factor that makes the consumer in Punjab sweat. He’s also made to pay more than he should be paying for what little power he gets. The cost of electricity has increased drastically over the past few years in Punjab. This is happening because the state has been deliberately reducing its own generation capacity, which causes an increase in the cost of production. 

Last word: IS Bindra
Man who spelt cricket with cash
By Subhash Rajta
Indian cricket had a pitch designed for gentle medium pace, but he came up with a very strong financial pitch. That made the BCCI super-rich, though that has failed to bring success in Tests abroad
"I don’t say anything off the record. Whatever I say is always on record." This is no punch line from a Salman Khan potboiler. The line belongs to IS Bindra, one of the longest-serving cricket administrators who called time on his distinguished innings when he stepped down as Punjab Cricket Association (PCA) president a few days back.

POWER PRICE
Punjab cuts generation, you pay extra
By Ruchika M. Khanna

Punjab has been deliberately reducing generation at its power plants while purchasing expensive power from outside the state. The consumer ends up paying for the increased cost.

Guru Hargobind Thermal Power Station at Lehra Mohabbat. File photo: Pawan Sharma

Shortage of power is not the only factor that makes the consumer in Punjab sweat. He’s also made to pay more than he should be paying for what little power he gets.

The cost of electricity has increased drastically over the past few years in Punjab. This is happening because the state has been deliberately reducing its own generation capacity, which causes an increase in the cost of production. Besides, this reduction in generation is covered by buying power at rates higher than own generation cost. The purchase is done from either the Central sector or private power traders and generators. This increased cost is paid for by the consumers.

Simply put, this means the consumer is paying more than what he would have were Punjab State Power Corporation Limited (PSPCL) to use the three state-owned power plants to their optimum capacity. Punjab’s own power generation capacity is 2,640 MW.

The shift towards purchase has happened particularly over the past two years. In 2012-13, the net power generation of PSPCL was 26,102.85 million units and net purchase (including from the Central sector, short-term purchase through traders, and long-term purchase) was 19,092.66 million units.

In 2013-14, the net generation came down to 20,408.75 million units while the net purchase increased slightly to 19,215.33 million units. During the current fiscal (2014-15) the net generation would actually be lower than the total power Punjab plans to purchase, as revealed by PSPCL documents accessed by The Tribune. The generation this year is expected to be 28,240.42 million units, while the net purchase would be a staggering 35,001.48 million units. Between April and July, PSPCL has already purchased 11,030 million units at an average rate of Rs 3.62 per unit. In July alone 3,740 million units were purchased at the rate of Rs 3.75 per unit.

Stiff price

While Punjab buys more power than it generates, PSPCL is paying Rs 1.25 more per unit for the purchase than its own generation cost. The per capita consumption of power in the state is 1,204 units. If 55.34 per cent of the power requirement for the state is met by PSPCL through purchase of power as proposed, that would mean 666.29 units (out of the 1,204 units) per consumer will come from the power purchased at higher rates. However, since the rate at which this power is purchased varies, experts in the power sector estimate that each consumer pays Rs 200-Rs 250 extra per month, over what he would have paid in case the state had supplied power from its own plants.

According to information received by The Tribune under the Right to Information Act, the per-unit average rate of total electricity units purchased in 2012-13 was Rs 3.63 and in 2013-14 (till December 2013) it was Rs 3.58. The rate of short-term power purchase in 2012-13 was Rs 3.78 per unit and in 2013-14 it was Rs 3.88. The average cost of own generation at the state government’s plants at Lehra Mohabbat, Bathinda and Ropar was Rs 2.63 per unit in 2013-14.

Profit for PSPCL?

K.D. Chaudhary, Chairman of PSPCL, when contacted by The Tribune said it was a conscious decision to buy more power. "We are buying power from private traders and from the Central sector to conserve coal and to beat the coal shortage at our power plants. There are issues with the company hired to mine and extract coal for Punjab, which are yet to be resolved. Since PSPCL and even the transmission company, Punjab State Power Transmission Corporation Limited (PSTCL), are actually making a profit, what is the harm in buying more power?" he said.

The harm, according to the PSEB Engineers Association, is that the huge capital investment made in setting up these power plants is going down the drain, as these are not being utilised to their full capacity.

Baldev Singh Sra, president of the association, says: "While the authorities are deliberately bringing down the generation at its own plants and buying power through traders or Central sector plants, consumers in the state continue to reel under power cuts and are also being forced to pay more for the increase in the state’s generation cost, which happens when the utilisation of the plants goes down." That happens because the efficiency of plants decreases at lower loads. Sra also questions the decision to reduce plant utilisation for conserving coal, especially when the state has its own captive coal mine.

Experts say that while transmission companies always make profit, the reason for PSPCL making profit is that last year saw a good monsoon and the power purchased was less. Padamjit Singh, a former president of the PSEB Engineers Association, explains the overall profitability also depends on the power tariff fixed each year by the Punjab State Electricity Regulatory Commission (PSERC). "The overall profit could be the cumulative effect of various factors. Even if the companies are making profit, for each activity that a company undertakes it has to minimise the cost of production and maximise profit. PSPCL authorities’ argument is wrong; you cannot surrender low cost power by backdown of own units and buy expensive power from private players," he says.

Backdown

Examination of the figures available shows that utilisation of all three state-owned plants has been coming down over the years, with the per-unit cost increasing correspondingly (See table).

Sra, president of PSEB Engineers Association, points out, that with frequent ‘backdowns’ (cut in generation over capacity) the flexibility of the plants’ grid operation was reduced drastically, as was the efficiency of each plant. "Since PSPCL is deliberating reducing the generation at its own plants, our capacity to backdown in case of a fall in power demand is also drastically reduced. Thus the plants become more susceptible to breakdowns," he said.

Sra also said that PSPCL, in its new policy of promoting private players in power generation, had promised that the per-unit cost of power generation would be lower (Rs 2.36 per unit from Talwandi Sabo and Rs 2.89 from Rajpura – the two new plants that have been commissioned till date). "One unit of Talwandi Sabo plant which is to give 613.8 MW to PSPCL was commissioned on July 2. But it has remained closed since July 6 because of non-availability of coal. The two units (660 MW each) of the Rajpura plant that are generating power are supplying at the rate of Rs 4.54 – Rs 5.67 per unit," he said, adding that the government should encourage its own power generation, especially as the state had its own captive coal mines.

Last word: IS Bindra
Man who spelt cricket with cash
By Subhash Rajta

Indian cricket had a pitch designed for gentle medium pace, but he came up with a very strong financial pitch. That made the BCCI super-rich, though that has failed to bring success in Tests abroad

"I don’t say anything off the record. Whatever I say is always on record." This is no punch line from a Salman Khan potboiler. The line belongs to IS Bindra, one of the longest-serving cricket administrators who called time on his distinguished innings when he stepped down as Punjab Cricket Association (PCA) president a few days back.

For cricket writers, bored to death by the routine anonymous comments or the stony silence of cricket administrators, an opportunity to talk or just listen to the man who believed in speaking his mind was always refreshing. "It takes a lot of courage and conviction to speak out as he does. He always spoke up, regardless of whose hackles it may raise," says Sushil Kapoor, an old-timer at the PCA. And speak he did with courage and conviction, to the last ball of his innings. He was the leading voice of protest, despite failing health, against the vice-like grip of N Srinivasan on the BCCI that had muffled all voices. It is to his credit that Bindra continued to oppose Srinivasan to the end when few dared to challenge him.

It was perhaps this particular trait of Bindra, besides the much acknowledged marketing and administrative acumen, that saw him rise from being president of the Patiala District Association in 1974 to BCCI president in 1993, and later to principal adviser to the ICC president.

Yet, his personal rise is merely a chapter in a rather voluminous narrative; at the core of his story is how he changed Indian cricket forever.

Came, saw and changed everything

Otherwise a career bureaucrat, it was his marketing ability that paved the way for his entry into cricket administration. "He was the Deputy Commissioner of Patiala in 1974. The District Olympic Association, which financially helps various sports bodies, was broke at the time. Bindra decided to organise a hockey match between a Punjab side and the Rest of Asia. It turned out to be a massive hit, with the Olympic Association collecting around Rs 5 lakh. It was a huge sum back then," recalls MP Pandove, PCA secretary and Bindra’s ally of all these years. "I was really impressed, and requested him to become president of the Patiala District Cricket Association, to which he agreed," says Pandove.

Money from airwaves

As he got deeper into cricket administration — he became PCA president in 1978 and gradually moved on to the BCCI — it was only natural for a shrewd man with a talent for marketing to realise that the board was sitting on a mound of untapped riches. Until 1992-93, when he became BCCI president, Doordarshan had the rights to telecast cricket matches without paying a penny to the BCCI. Bindra, along with his then friend Jagmohan Dalmiya, asserted that the telecast rights were the board’s property, and it should be allowed to exploit them commercially. The BCCI, under his stewardship, fought a bitter battle in the Supreme Court and eventually won it. With that landmark decision, and private broadcasters lining up to buy the telecast rights, money came flooding into Indian cricket. And the game had changed forever.

Bringing the Cup to India

Another of his huge feats was to break England’s monopoly on hosting the cricket World Cup and bringing it to the Indian subcontinent in 1987. NKP Salve, then BCCI president, wanted to move the World Cup out of England. And the man he chose for this mission impossible was Bindra. "He masterminded the whole operation, challenged the England board to have bids for the event, and eventually India and Pakistan co-hosted the Cup in 1987," said Pandove. The World Cup not only gave a massive fillip to the popularity of the sport in India, it also kick-started the BCCI’s journey towards becoming the dominant board and India becoming the financial engine of the sport.

Stadium and controversies

Where today stands the Mohali cricket stadium, once a nullah carrying dirty water flowed. Way back in the 1990s, building a modern stadium like the one in Mohali was nothing less than a wonder. While it was undisputedly the best in India, it also matched the world’s best, standing tall as evidence of India’s growing stature.

The beautiful stadium, however, had its share of controversies. It has been alleged that Bindra misused his position in the Punjab Government (as Secretary, Sports) to lease out the 13.56 acre of land to the PCA, of which he was the president, for 99 years at the paltry rate of Rs 100 per annum. Later, the PCA received Rs 11.07 crore in grants — Rs 10.15 crore from the Punjab Urban Planning and Development Authority (PUDA), Rs 15 lakh from the Punjab Sports Council and Rs 77 lakh from Punjab Small Savings. The PCA stadium is, thus, financed largely through public funds, through Bindra’s connections.

Stoking board’s hunger for money

While he has largely been associated with everything that’s good about Indian cricket, Bindra will have to take a bit of blame for being part of the group that transformed the BCCI into a corporate house whose sole purpose now seems to be earning profit. As a mentor to Lalit Modi, who gave India the IPL — the source of a large number of controversies and ills afflicting Indian cricket — he failed to see that for his protégé, cricket was just a money-making machine. The IPL made the rich cricketers richer, and a wealthy BCCI wealthier, but at the same time it undermined the Indian national team. Can money be a consolation for the humiliation the Indian team regularly suffers in Test cricket overseas?

Maybe Bindra will regret his generous support to Modi some day. And if he ever does, we will know it, for his way is to put things on record.