CALCUTTA, June 13: CESC Ltd, belonging to the RP Goenka group, has reported a loss of Rs 125 crore for 1997-98 against a net profit of Rs 41 crore in 1996-97. This is for the first time in its 101 years of existence that the company had incurred a loss. However, the company's net sales went up by Rs 146 crore.The company has also demanded a tariff revision from the West Bengal government to guard against losses in future.
This loss was mainly due to a substantial increase in interest burden which went up from Rs 132 crore in 1996-97 to Rs 237 crore in 1997-98, CESC managing director Sumantra Banerjee said that the loss increased substantially to Rs 96 crore in the second half of 1997-98, compared to Rs 29 crore in the first half. For the newly commissioned Budge Budge plant, the company had to pay an interest of Rs 56 crore. However, the plant saved CESC Rs 21 crore since the company did not have to purchase power from the West Bengal State Electricity Board to that extent.
The company expects thestate government to allow it to realise the arrear fuel surcharge of Rs 374 crore for the last two fiscals out of which Rs 104 crore has to be paid to WBSEB. Moreover, Rs 11 crore has to be paid to WBSEB as delayed payment surcharge. The leasing expenditure has also been in the order of another Rs 11 crore. The cost of financing the arrear fuel surcharge, as calculated by the company, was around Rs 57 crore.
"We had to incur the loss despite substantial improvement in the technical front. We could reduce our transmission and distribution (T&D) losses by one per cent and plant load factor (PLF) has gone up from 74 per cent to 75.5 per cent, an increase by 1.5 percentage point. The reduction in T&D losses has helped the company to save Rs 7.5 crore," Banerjee said.
"The company will continue to incur losses unless there is a revision of tariff which is long overdue," he said and added that "CESC management will take up the matter with the state government soon for due consideration."
The last tariffrevision of around 9 per cent was allowed to the company in November, 1996, after a gap of 22 months. This left a net margin of only about two per cent available to the company after offsetting the increase in cost of power purchased from other agencies, including WBSEB. CESC purchases about one-third of the power it distributes from WBSEB. There was no tariff revision during 1997-98. Total expenditure of the company also went up from Rs 1,163 crore to Rs 1,324 crore.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
