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Tech firms to gain as $2 bn to be spent on IT in energy sector

Tech firms to gain as $2 bn to be spent on IT in energy sector
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First Published: Tue, Oct 20 2009. 09 51 PM IST
Updated: Tue, Oct 20 2009. 09 51 PM IST
Mumbai: Technology firms are set to cash in on the Union government’s push to reform the country’s power distribution network, as India lines up at least $2 billion (Rs9,200 crore) to help cap energy losses through use of information technology (IT), industry experts said.
The government has launched a Rs50,000 crore plan to cut power distribution losses, with one-fifth of the funds devoted to using IT at state-run distribution utilities.
“It’s a massive opportunity. As a business opportunity, IT companies are excited,” said Rajdeep Sehrawat, the vice-president of industry lobby group National Association of Software and Services Companies (Nasscom).
Several IT firms have eyed state-funded projects to help tide over the global economic slowdown, which had put the brakes on the sector’s scorching pace of growth as their core overseas clients slashed technology spending.
“In the next three-four years, the utilities will spend a lot of money, they don’t have a choice and the government is providing them a lot of money,” said Vilas Kanyal, business unit head at software firm Mastek Ltd, which is starting to offer IT consulting for utilities.
Under the power reforms scheme, many domestic and global IT firms have been empanelled to serve as consultants or act as implementation agencies to distribution firms.
States such as West Bengal and Rajasthan have already awarded IT projects, while others, including Madhya Pradesh and Maharashtra, are in the process of doing so, government officials said.
Tata Consultancy Services Ltd (TCS) won a Rs193 crore project in West Bengal, said Moloy Dey, chairman, West Bengal State Electricity Board.
TCS has also been selected as lowest bidder for a project worth Rs293 crore in Madhya Pradesh, while HCL Infosystems Ltd won a project in Rajasthan worth Rs529 crore.
Under the scheme, IT work will involve setting up data centres, geographic information system mapping, and entail applications for reading meters, billing and collection, energy accounting and auditing and consumer grievance redressal.
Around 30-plus distribution firms have identified IT consultants for the programme, said a power ministry official who declined to be identified.
State-run power distribution utilities are trying to improve their operations, but the process is hampered by extremely low levels of efficiency, said a recent report from financial services firm India Infoline Ltd.
Around 30% of the power produced in the country is lost in transmission and distribution annually due to pilferage and technical snags, compelling the Union government to invest in using IT to identify the losses.
“The challenge is now going to be: Can IT companies provide solutions for an integrated distribution system, given the antiquated systems (of distribution companies), the crowd and the volume?” Nasscom’s Sehrawat said.
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Niladri Bhattacharya contributed to this story.
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First Published: Tue, Oct 20 2009. 09 51 PM IST