Maharashtra Government assures help to BEST, but where will the money come from?

In what seems practically impossible to do because of the constraints its debt-ridden coffers face, the state government has assured the island city power consumers that it will grant financial assistance to the Brihanmumbai Electric Supply and Transport (BEST) undertaking to avoid a tariff hike this year..

BEST has asked the state for a bail-out package
BEST has asked the state for a bail-out package

Energy minister Chandrashekhar Bawankule on Wednesday assured help in reply to a debate raised by MLC Narendra Patil, who opposed the BEST’s proposal that the power consumers across the city should pay for recovering its Transport Deficit Recovery Loss (TDLR) of R 1,689 crore. Currently, BEST recovers TDLR from its 10 lakh consumers.

“The government will intervene once Maharashtra Electricity Regulatory Commi-ssion (MERC) approves the BEST tariff. We will also see to it that all power consumers in Mumbai are not forced to pay TDLR,” said Bawankule.

According to power sector experts, offering financial grants to BEST or directing MERC to stay the undertaking’s new tariff would be the two best possible ways of doing it. The minister did not clarify as to how the state would help out a larger chunk of consumers in the western and eastern suburbs.

But the question is will the state which is reeling under a debt of Rs 3.50 lakh crore be able to shell out significant grant to BEST? The BJP government had even stopped a monthly subsidy of Rs 700 cr that the earlier government had sanctioned for reducing the burden of the consumers of the Mahavitaran, a state-controlled power distribution company that caters to the eastern suburbs of Mumbai and rest of Maharashtra.

“MERC decides tariff after electricity companies approach it for tariff revision. The government cannot intervene while MERC is hearing the tariff proposal. We are not in favour of imposing TDLR on all Mumbaikars and we will wait for the MERC decision,” said Bawankule. All of Mumbai’s power companies, two private (Reliance and Tata), civic undertaking BEST and state’s Mahavitaran have submitted their tariff revision proposals to MERC. All of them want better hike in next three years.

In view of differential tariff for all four companies, the consumers are demanding a uniform tariff in the city, which has close to 45 lakh consumers. The state government has recently appointed a consultant to study the issue. In case of BEST, which is fast losing its business to Tata Power in the island city, the business has become even more difficult to run because of a loss-making transport wing. Unfortunately, the two businesses – electricity distribution and transport – cannot be separated for legal reasons. As of now BEST’s transport is benefiting largely from the profit-making electricity business. BEST has repeatedly asked the state for a bail-out package.

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