Govt may make IT application a must for power project loans

Govt may make IT application a must for power project loans
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First Published: Tue, Aug 26 2008. 12 21 AM IST
Updated: Tue, Aug 26 2008. 12 21 AM IST
New Delhi: The power ministry plans to make application of information technology (IT) mandatory for projects for them to be eligible for funding from state-owned lenders such as Rural Electrification Corp. Ltd (REC) and Power Finance Corp. Ltd (PFC).
“We plan to make IT (application) mandatory to access loans. An initial meeting has been held in this regard,” said a power ministry official, requesting anonymity.
REC and PFC together account for 60% of the money lent to power companies. In the fiscal year to March, they loaned Rs61,000 crore to the sector.
A PFC executive, who didn’t wish to be named, confirmed the development. “The general discussion in the meeting was to put more emphasis on IT. For example, the real transmission and distribution loss assessment can only be done if IT systems are put in place across the country.”
State-owned power utilities don’t even maintain up-to-date financial accounts due to lack of proper IT infrastructure. Since the work is done manually, it takes longer to collate data and audit it, said a government official, asking not to be named.
“We already give concessional loans to encourage IT applications. IT is required for all sectors, be it generation, transmission, or distribution,” the PFC executive added.
A senior REC official, who didn’t wish to be identified, said, “Implementation of IT, new automatic metering and separate feeder for different consumer groups are all steps towards bringing efficiency in the system.”
“There is no template for power distribution utilities to implement IT applications. It is a good step on the part of the government if they can implement it. Even vendors (software companies) have not been able to develop these specialized IT applications because the opportunities have been few and far between,” Shubhranshu Patnaik, executive director at audit and consulting firm PricewaterhouseCoopers, told Mint.
The Union government is worried about its flagship power sector reform programme falling short of targets due to poor IT infrastructure and other reasons. Its accelerated power development and reforms project (APDRP) has not been able to lower power losses to 15% by the end of 2007, as originally targeted in 2000-01.
Mint had reported on 18 April about state-owned power utilities’ plans to place, before March 2009, orders for Rs10,000 crore worth of software that can help them manage their distribution networks better as part of the government’s APDRP.
The power ministry has been seeking help from the domestic IT industry.
Mint had reported on 25 August that Tata Consultancy Services Ltd plans to assist the government in speeding up power sector reforms.
“The power sector is opening up and IT can play a major role in bringing about standardization, transparency, revenue realization, and transmission and distribution losses in the sector. Technology innovation can only benefit the sector,” Ranjan Tayal, head (India region) at Satyam Computer Services Ltd had earlier said.
Power shortages due to limited generation capacity and growing electricity theft have been identified as key infrastructure bottlenecks threatening the country’s ability to sustain an economic growth rate of more than 8%.
Around 34% of power generated in India continues to be lost due to theft and pilferage. The country has an installed capacity of 143,000MW and plans to add another 78,577MW by 2012.
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First Published: Tue, Aug 26 2008. 12 21 AM IST