Tata Power has planned capital expenditure of Rs.2,830 crore in two recently-acquired Odisha distribution companies, WESCO and SOUTHCO, over the next five years.
According to information released by Odisha Electricity Regulatory Commission (OERC), Tata Power will invest Rs.1663 crore in WESCO and Rs.1167 crore in SOUTHCO, over the ensuing five fiscal years—FY22 to FY26. (Total period: April 1, 2022 to March 31, 2026). In both the cases, the annual capex will be the highest in FY23. (See table)
Proposed Capital Expenditure |
|||
| (Rs.crore) | |||
| WESCO | SOUTHCO | Total | |
| FY22 | 306 | 227 | 533 |
| FY23 | 500 | 316 | 816 |
| FY24 | 333 | 241 | 574 |
| FY25 | 322 | 233 | 555 |
| FY26 | 202 | 150 | 352 |
| Total | 1,663 | 1,167 | 2,830 |
The proposed capital expenditure would be directed towards improving safety, technological intervention, upgrade of the network system and loss reduction.
Tata Power, it may be recalled, has taken over the operations of all the four existing discoms of Odisha – CESU, SOUTHCO, WESCO and NESCO. In each case, Tata Power will be forming a joint venture with state government entity GRIDCO Ltd where it will hold majority 51 per cent equity stake and GRIDCO holding the remaining 49 per cent. The JV will act as a distribution licensee for a period of 25 years. The JV will meet its power requirement through GRIDCO Ltd, by entering into long-term bulk supply agreements. (Read more)
AT&C losses
In the case of WESCO, Tata Power has committed to bring down AT&C losses from the present 27.56 per cent to 9.08 per cent, over the next ten years. With regard to SOUTHCO, where the current AT&C losses are at an alarming 35.29 per cent, the target is to bring this metric down to 14.80 per cent, in the next ten years.
Tata Power has also committed to collect the payment arrears of Rs.300 crore in the case of WESCO and Rs.100 crore relating to SOUTHCO, over the next five years.
The new JVs
WESCO and SOUTHCO will now operate under the company name as TP Western Odisha Distribution Ltd (TPWODL) and TP Southern Odisha Distribution Ltd (TPSODL) respectively.
TPWODL will be responsible for the distribution and retail supply of electricity in five circles of WESCO covering 2 million consumers with annual input energy of 7,520 million kwh in areas of Rourkela, Burla, Bhawanipatna, Bolangir, Bargargh, while TPSODL will be responsible for the distribution covering 2.3 million consumers with average energy input of 3470 million kwh and retail supply of electricity in six circles of SOUTHCO in areas of Ganjam City, Berhampur, Aksa, Bhanjannagar, Jeypore and Rayagada.
The geographical area under WESCO and SOUTHCO is over 47000 sqkm each, and the distribution network is worth over 1,00,000 ckm each.
Note: Tata Power would also have made capex commitments in the case of the other two discoms—CESU and NESCO (sometimes referred to as NORTHCO). However, this information is currently unavailable.
