By Rudi Warjri
Meghalaya State Electricity Regulatory Commission (MSERC)
The Electricity Regulations in Meghalaya 2007 under The Electricity Act, 2003 had constituted the Meghalaya State Electricity Regulatory Commission (MSERC). Para 86 laid down the functions of the State Commission in detail. In practice the Commission is effective only with respect to 86(a) of its function which means determining the tariff to be paid by the consumer . The tariff has remained fixed for the last several years despite the inflation. The cost of power production, supply and power purchase, had called for a higher tariff. Consequently, the cost of production, transmission, distribution and purchase of power, far outweighs the revenue from sale of power. In these circumstances, the only possible outcome is financial loss. Para 91 is about Secretary, Officers etc of the Commission. As can be seen in the appointment of persons to posts in the Commission’s office, the Rules followed by the State Government with regard to their eligibility criteria such as age, qualification, etc., have not been followed. Some officials enjoy their appointment without any retirement. Interest business groups also play in determining tariffs. Government should review the functioning of the Commission else it has become more of an institution to accommodate retired bureaucrats .
Unbundling:
Upon its corporatization, the Board was re-organized into four Companies; the Meghalaya Energy Corporation Limited (MeECL) as the parent Company with the Meghalaya Power Generation Corporation Limited (MePGCL), Meghalaya Power Transmission Corporation Limited (MePTCL) and the Meghalaya Power Distribution Corporation Limited (MePDCL) as its subsidiary Companies. One basic requirement upon its corporatization is the unbundling (separation) of the accounts of the MePGCL, MePTCL and MePDCL from the accounts of the MeECL. This would have ensured true and correct accounting while at the same time, apportioning responsibility among the companies. It has been ten years since the corporatization of the MeECL. The accounts of these Companies have not been unbundled till date. This should have been the foremost priority of the Accounts Wing. The absence of a full time Director of Accounts for a very long time has worsened the situation. Even the most basic of tasks, including identifying and putting a check on wasteful expenditure, is proving to be difficult. The combination of inadequate funds and wasteful expenditure is a recipe for disaster, which is beginning to manifest itself in the agitation by the employees unfolding before our very eyes.
The failure to unbundle the accounts of the different Companies, means that the parent Company has to juggle the affairs of each subsidiary company, besides its own, which is a mammoth task in itself. The nebulous character of this arrangement impedes the growth of the individual companies. With no proper demarcation and delineation of powers, there is nothing to prevent overlapping of jurisdictions and authority and subversion of the protocols and procedures necessary to sustain the Companies themselves. Despite marathon Board meetings it is not possible to scrutinize proposals and propose proper checks and balances.
Management, Board of Directors, Government etc:
The CMD or Chairman cum Managing Director is the Chief Executive of the Board. Some CMDs have tried innovative strategies and methods with regard to revenue generating. Bonds were floated. Its success however also depends on the credit-worthiness or rating of the corporation. In the midst of the Pandemic another CMD had mobilized volunteers to do the meter reading and billing just to meet the revenue target that at least had enabled the payment of the salaries of the employees on time .
The Board of Directors include two Independent Directors (IDs) who act like watchdogs and represent public interest in the Board. Their effectiveness however depends solely on the information and inputs made available to them by the management with all its limitations which runs contrary to the approved practices and norms followed by Companies.
The Corporation also requires legal expertise that can protect its embattled interests and vulnerable assets. Lack of proper scrutiny and vetting of the contracts it enters into, will harm its interests. The issues that the Corporation finds itself embroiled in, whether they relate to acquisition of land for projects, breach of its contracts, encroachment of its lands, processes related to taxation procedures, petitions before the State Electricity Regulatory Commission or Electricity Tribunals or various other litigations, can only be resolved with the aid of sound legal counsel.
It has been almost fifty years since the Board, now Corporation, has been handed over to the State of Meghalaya. In all these years, there has been no visible action or initiative taken by the Government to address or halt the problems faced by the Corporation. It is incomprehensible that the public should be made to pay, in more ways than one, for the stupor exhibited by the Government. The void left by the inaction and stupefaction of the Government is a fertile ground for the interplay of the personal interests of pressure groups, delinquent employees who do not want to be accountable for dereliction of their duty, and politicians, whether accomplished or in the making. These actors stoke the fires of unrest without delving into the root of the problem, which perhaps, if practised over the years, could have benefitted the Corporation.
At this juncture, it would be wise for the reader to remember that this is not the failure of only the present Government. As tempting as it may be to politicize the issue, it will not do much good. The heat and dust only increase the attrition without offering any concrete way forward. The MeECL did not deteriorate overnight. There are many contributing factors that have led to this situation, a few of which have been mentioned above.
Way forward:
In this digital age, electricity is a basic and essential requirement. The COVID scenario has seen a shift from ‘offline’ to ‘online’ mode of execution of all kinds of official, commercial and economic activities, including academic and other professional activities which cannot be sustained in the absence of regular and efficient power supply. For such a tidal wave of problems, there is no easy solution.
(i)The Corporation could identify its liabilities and weaknesses whenever and wherever they are detected, whether in its human resources, infrastructure, administration or management and deal with them comprehensively and conclusively. Rules provide the backbone and skeleton for every organization. Reluctance to administer the Rules will lead to the collapse of the administration and ultimately, the power supply structure. The Inquiry Report by Mr Malcolm David Roy should be studied and taken seriously . The report reflects among other things the work culture in MeECL etc.
(ii)More focus to capacity enhancement and skill training. All its employees must be grounded in the concept of the word ‘Corporation’ and the duties and responsibilities required of them. They must not, under any circumstance, be led to believe that the Management and the Government exist only to pay their salary. It is important for them to understand that they are responsible for their own revenue and that failure to perform their duties will have a disastrous impact on the Corporation.
(iii)MeECL etc is basically an operational body. Government should leave the entire operation to the Management under the CMD and not interfere in its day to day activities like tenders, purchases , contracts etc .
(iv)One way of reducing cost on the billing and revenue generating system is to make the Smart meter mandatory.
(v)Government must come out with a comprehensive Power Policy that would tap all sources of energy from conventional to renewable. The workload of MSERC should be optimized as per the Electricity act 2003.
(vi)I am not advocating that Government should sell its family silver just to meet the crisis. However, outsourcing services especially proven successful in other States should be seriously considered .
(vii) In fine, it calls for a fundamental change in mindset by all stakeholders from the Government all the way to the consumers.
“We cannot solve our problem with the same thinking we used when we created them” – Albert Einstein
(The writer is former diplomat and is also the Ex – Independent Director, MeECL , etc)