Spread the love
Shillong: Sanjay Goyal took charge of Meghalaya Energy Corporation Limited, or MeECL, as its CMD at a time when the entity is struggling to stay afloat and fighting internal battles at the same time. The weak finances and intermittent protests by employees have affected the health of the enterprise. However, Goyal is confident that MeECL will turn around but the process will take time.
In an interview with Business-North East, Goyal talks about the road map for making MeECL agile and revenue-generating.
BNE: You have come to the helm of MeECL at a time when it is going through a rough phase. How are planning to handle the problems, especially on the financial front?
CMD: The problems have to be tackled on various fronts and there is a scope for improvement in all aspects of the functioning of the corporation which includes management of human resources, finances, generation and transmission capacities, and most importantly, the distribution sector. We are also trying to tackle the regulatory issues from the tariff point of view.
On the financial front, in the past, the corporation availed several loans for the execution of generation projects and it has increased its capacity by about 190 MW from hydro projects in the last one decade. The financial burden/implications for the first about 15 to 20 years for any hydroelectric project is high due to payment of interests, but in the long run, it will give a huge financial benefit to the consumers of the state as we are providing cheap power from these projects.
However, to reduce the present burden of interest payment, multiple steps have been taken, such as negotiation with PFC and REC (lending institutions of GoI) to reduce the interest rates, improvement of the ratings of the corporations and timely repayment of loans to avoid penal interest.
Also, we are strengthening our accounting practices, and in the last six months, we have been able to reduce the backlog of finalizing our quarterly accounts and are now up to date.
On the commercial aspect, our focus is to generate more revenues by increasing our billing and collection efficiency and recovery of past arrears.
BNE: What are the projects in the pipeline and what amount has been earmarked for each?
CMD: DISCOM: We will focus on the loss reduction programme of GoI under its scheme Revamped Distribution Sector Scheme. It has an outlay of about Rs 700 crore, which would be spent in the next three years.
GENCO: Planning for LESHKA Phase 2 — the detailed project report preparation is under process.
BNE: Do you see MeECL turning around in the next five years? What is the current annual profit/loss?
CMD: Yes, I am confident that it would happen. As I have mentioned, there has to be a multi-pronged approach with support and inputs from each and every employee of the corporation.
As you know that electricity is a regulated business, so we need to think and work like a commercial organisation where each and every action and decision has to be seen and evaluated from the commercial lens.
The current financial position of the three subsidiaries, viz. DISCOM, GENCO and TRANSCO, is not good and we are incurring losses to the tune of about Rs 500-600 crore per annum.
The state government is infusing the funds to take over losses of the DISCOM as per Trajectory approved by the Ministry of Power. Apart from this, the state is giving budgetary support to the tune of about Rs 500 crore as equity to overcome the present financial crisis.
BNE: As the new head of MeECL, what is your road map?
CMD: The road map will intend to:
• Increase revenue collection by increasing proper billing and outstanding revenue recovery from high-value consumers.
• Reduce expenditure by restructuring loans and interest.
• Find a solution for payment of termination liabilities.
• Make effective manpower deployment and technological intervention to optimise manpower cost.
• Strengthen the accounts wing for timely and correct accounts so that effective tariff petitions can be filed in time before the MSERC.
BNE: What action has been taken on the inquiry report of the independent committee?
CMD: The corporation will execute the state government’s direction given/to be given. However, we have initiated the steps to go for strengthening our internal audit by engaging a professional firm and implementing proper corporate governance as per the guidelines of the Government of India.
BNE: Will MeECL go for privatisation as per the Electricity (Amendment) Bill, 2022?
CMD: There is no intention.
BNE: Is the smart meter project a failure? What kind of technology is MeECL mulling for future streamlining as well as bettering services?
CMD: Any project or scheme is reviewed on the basis of the parameters of the scheme.
Meghalaya is one of the few states which took to implementing smart meters at a very early stage as compared to other states in India. The project is on track, though a bit slow, as it faced initial teething problems which always happens at the time of introduction of any new concept/technology. Network coverage in rural areas and resistance in some pockets are being tackled by us and we are confident that it will be completed successfully.
