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Department of Power
Bidyut Unnayan Bhawan
Plot 3/C, LA Block, Sector III, Salt Lake City
Kolkata – 700 098
The under mentioned case of the Power Department, of which a spare set of papers
is herewith forwarded, will be for discussion in the next meeting of the Cabinet.
MEMORANDUM
Subject: Proposal for sanction of the Revamped Distribution Sector Scheme (RDSS) for
Strengthening and Grid Modernization Project to develop the Smart Meter,
Loss Reduction and Electricity Grid Modernisation in West Bengal to be
implemented by WBSEDCL as a Central Sector Scheme with the Govt. of India
and State Government financial assistance along with loan assistance of the
Asian Development Bank (ADB) with financial involvement of Rs 12383.044
crore.
1. INTRODUCTION:
1.1. The rapid economic growth in West Bengal has resulted in a growing electricity
demand at a compound annual growth rate (CAGR) of 4.5 percent during the last
five years. The electricity supply has kept pace, resulting in the state’s energy deficit
being within a low margin of 0.3–0.4 percent during the same period.
1.2. While WBSEDCL has extended grid connectivity to almost all consumers across the
state, the large consumer base of low paying and low-consumption households has
put a strain on WBSEDCL finances. The number of consumers served by WBSEDCL
has more than doubled in the last six years under the ‘Sabar Ghare Alo’ to almost
2.07 crore consumers with the main increase coming from rural areas and the state
reaching universal electricity access. WBSEDCL’s consumer mix is characterized by
a high proportion of low paying domestic consumers (around 95 percent of
WBSEDCL’s total consumer base), contributing to only around 39 percent of
WBSEDCL’s total retail sale in million units.
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1.3. WBSEDCL’s priority has now shifted from basic access to providing improved
quality and reliability of electricity supply and ensuring its financial sustainability.
Although the state has adequate power capacity, the intrastate distribution network
will need to be strengthened to ensure that quality power supply is adequately
supplied to the large consumer base, especially in rural Bengal. The doubling of the
consumer base has led to multiple operational and financial challenges mentioned
below that will need to be addressed:
1.3.1. Reducing aggregate technical and commercial (AT&C) losses. Due to wide
distribution spread over a wide geographical area, AT&C losses steadily grew to
reach around 30% in FY15. WBSEDCL has been taking several initiatives to
reduce the losses, and these have come down to around 20% in FY20 but have
again increased to 21.3 percent in FY21 because of COVID-19. Ideally, they
should be in the 10-15% range covering the entire State.
1.3.2. Improving quality and reliability of power. Again due to the geographical
spread, WBSEDCL is facing a challenge in maintaining quality and reliable
supply. The network suffers from frequent outages with the distribution
transformer failure rate varying between 4 & 10 percent. Improvement of the
quality and reliability of supply, by strengthening infrastructure and
incorporating self- healing capability in the network through automation, will be
important for retaining the existing large consumers.
1.3.3. Integrating advanced operation technologies (OTs) and automation of internal
business operations. Globally, the business environment of Discoms is seeing a
paradigm shift with the deployment of new technologies such as electric vehicles
and increase of distributed energy resources such as solar rooftops. WBSEDCL
is has to upgrade its ICT and OT systems to automate network operations to
facilitate integration of renewable energy and handle the growing impact of
increasing number of prosumers, electric vehicles, and other distributed energy
resource applications. Automation will help WBSEDCL to monitor the reliability
of supply, identify and restore network disruptions, and track consumer
complaints efficiently, thus leading to improved customer satisfaction.
1.3.4. Building resilience against extreme climate events. Due to its proximity to the
Bay of Bengal, West Bengal is frequently affected by cyclones and strong winds,
especially in the monsoon season and the frequency of severe cyclonic storms is
increasing noticeably. In May 2020, Super Cyclone ‘Amphan’ caused significant
damage to the electricity infrastructure in West Bengal. Given this context, it is
important for WBSEDCL to consider climate and disaster risks in system
expansion and modernization, through hardening of the network using aerial
bunched cables (ABCs) and underground cabling and communications
capabilities that can withstand the impact of extreme weather events or quickly
recognize and address disruption after the event has passed.
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1.3.5. Securing financial sustainability. WBSEDCL had generated profits in the past
and its financial performance has deteriorated in the last three years due to high
AT&C losses and lack of regular tariff revisions leading to adverse Aggregate
Cost of Supply (ACS)-Aggregate Revenue Requirement (ARR) gap. To support
the low-paying lifeline consumers, in the State Budget for 2020, the State
Government started providing subsidies for consumers with quarterly
consumption of less than 75 kWh under the ‘Hashir Alo’ scheme.
1.4. Thus, the sub-optimal performance of the distribution sector is due to structural and
management deficiencies and residuary weaknesses in the infrastructure.
WBSEDCL needs to focus on improving its operational efficiencies and financial
sustainability and improve consumer services to be able to meet the desired
consumer service standards. This is a universal phenomenon in the country and
hence large-scale reforms are necessary to reduce losses to make them financially
sustainable and operationally efficient. It was with this reason that the GoI has
proposed a Revamped Reforms Based and Results Linked Distribution Sector
Scheme (RDSS) with a total outlay of Rs 3,03,758 Crore with a grant of Rs 97,631
crore to undertake reforms and improve performance in a time bound manner in
continuation to the earlier schemes mentioned above. The scheme is expected to be
completed by 31/3/2026.
1.5. The objectives of the RDSS Scheme:
i. Improvement in the quality, reliability, and affordability of power supply to
consumers through a financially sustainable and operationally efficient
distribution sector.
ii. Reduction of AT&C losses to pan-India levels of 12-15% by 2024-25.
2. THE SCHEME:
With a view to meet the above objectives, the scope of the scheme as follows:
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• Prepaid Smart meters for consumers along with associated AMI in TOTEX
through prepaid or smart prepaid mode.
• Metering of unmetered feeders and making all feeder meters (new and old)
online
a) Loss reduction:
• Aerial bunched Cables in high loss areas
• HVDS in high loss areas
• New feeders, capacitors, etc. for loss reduction
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Based on the RDSS guidelines and in order to finalize Action Plan & DPR in a time bound
manner, WBSEDCL had constituted a committee. RECPDCL & PFCCL were engaged for
this purpose following the provision of scheme guidelines. Engagement of consultants was
done in the following manner:
• PFCCL: Consumer & System metering works.
• RECPDCL: Distribution Infrastructure Works and submission of consolidated
report covering all works
Both the consultants had submitted Action Plan and the DPR. After detailed discussion the
plan has been finalized. The Action Plan contained analysis of as-is condition and proposal
for improvement of different performance parameters which was used to feed into the
requirements of the DPR of the RDSS Scheme. The Board of the WBSEDCL had approved
the Action Plan and DPR prepared on 23/12/2021. The Action Plan was reviewed on
29/03/22 in REC Headquarter and virtually on 12/04/22 by the Secretary Power after which
a revision was suggested. By the letter dated REC/RDSS/WB22-23/179 dated it was
intimated that:
”…the tentative allocation of West Bengal State under RDSS scheme is Rs. 7148 crore for both Loss
reduction and modernization works. Since, DPR prepared by WBSEDCL under loss reduction is of
Rs 7337 crore it was advised that WBSEDCL may recast the loss reduction DPR to around Rs 5,700
crore and balance works may be taken up in modernization DPR.”
A State-level Distribution Reforms Committee (DRC) headed by the Chief Secretary was
duly constituted by order no. 11-PO/O/C-I/5S-09/21 dated 30th November, 2021 for
approving the Action Plan and DPR and obtaining the approval of the State Cabinet after
which it would be submitted to the Monitoring Committee of the Ministry of Power (MoP)
for sanction. The DRC approved the revised allocation on 13/05/22. The RDSS guidelines
at 5.1.6 paragraph permitted the raising of counterpart funding from bilateral/multilateral
funding agencies and the DRC decided to access an ADB loan of USD 500 million to reduce
the financing burden on the State Government on 8/06/22.
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i. Fund will be released on successful installation, commissioning and providing of
essential services/data related to it for a period of one month to the DISCOM.
ii. Consumer meter be recharged at least once.
Parameter Weightage
Financial Stability 60 marks
Outcomes of Infra works 20 marks
Outcomes of Infra works 10 marks
Policy and Structural Reforms 10 marks
Total 100 marks
Minimum marks =60
.
c) If by the end of FY:2025-26, a DISCOM is not eligible for release of any grant, the initial
advance of 10% of the grant component of the cost of DPR for Loss Reduction will
have to be refunded by the DISCOM.
d) The Monitoring Committee is empowered to recall the grant released to the DISCOMs at
any stage of the scheme, in case the sanctioned works are left incomplete, or the assets
could not be put to use, or funds are utilized for purposes other than those prescribed
in the scheme/as approved by the Monitoring Committee in accordance with the
prescribed guidelines.
e) Apart from the GoI gross budgetary support (GBS), to lessen the burden of the State
Government contribution of 40% it has been proposed to obtain the loan assistance of
the ADB to the extent of USD 500 million. The RDSS scheme guidelines permit the
same at paragraph 5.1.6. Accordingly a Preliminary Project Report (PPR) has also
been prepared.
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Compliance to RDSS PQ
Condition Status
Payment of State Govt. dept. dues of 68% paid. State Govt. has instructed for
FY 2022 release of dues quarterly.
No. of days payable for FY 2022 are Day payable in FY 2022 is 105 days
equal or less than projected trajectory (Provisional) which is equal to the Target for
in REF FY 2022.
Tariff order issued for FY 2023 before Issued till FY-22, Petition filed in Aug-20,
1st Apr 2022 Order not yet issued by WBERC
True-up order issued of penultimate Issued till FY-13, True-up order FY 2020-21 is
year (FY 2021) before 1st Apr 2022 not yet passed
Progress commensurate to
commitment in putting Govt. Offices Will be ensured as per trajectory.
on prepaid meters as per REF
Undertakings Status
Done under
2 To enable self-assessment by consumers
EoDB
Bills for subsidies are raised by DISCOMs and paid upfront
3 Complied
every quarter/month
Cost-reflective tariff without subsidy to be notified. State
4 Govt. to simultaneously notify category-wise subsidy on per Complied
unit and/ or per KW basis.
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Undertakings Status
a) Tariff Order for FY 2023 not issued before 1st Apr ‘22
11 West Bengal b) Govt. Dept. dues for FY 2022 not cleared
c) Quarterly Unaudited accounts not available
Tariff
True-up
Payment order
Publishing 100% order
No new of State issued
of payment issued of
regulatory Govt. for FY
State Quarterly of penultimate
asset dept. 2023
un-audited subsidy year (FY
created dues of before
accounts for FY 22 2021) before
FY 2022 1st Apr
1st Apr 22
22
West Order Partly Not Not
Complied Complied
Bengal Awaited Complied Complied Complied
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a) Metering
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5 IT/OT enablement works
Procurement for
5a infrastructure of IT/OT 0 47.060 9.500 6.700 63.260
integration
Unified data management
5b system with analytics and 0 15.000 25.000 25.000 65.000
dashboard.
Data centre Upgrade for
6
unified Billing
Data center infrastructure
upgradation(for introduction
6a of monthly billing 0 40.250 25.250 20.000 85.500
system)server storage network
devices
7 DCU/SIM
DCU for Feeder metering/
7a 0 0.500 2.000 2.000 4.500
System metering.
Total (excluding PMA Charges) (INR
0 2446.498 2409.723 2528.752 7384.972
Cr.)
PMA Charges @ 1.5% of the project cost (Loss reduction works) 110.775
Total Project Cost Inc. PMA 7495.747
c) Modernization Works
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Year on year phasing of project
Cost (INR Cr.) based on Physical Estimated
Sl. Targeted interventions for system targets Outlay as
No. strengthening per DPR
FY23 FY24 FY25 FY26 (Rs. Cr)
Implementation
6 0.000 15.000 10.000 17.984 42.984
SCADA/DMS/OMS /RT-DAS
Disaster Resilient Infrastructure
7 15.037 15.037 15.037 15.037 60.150
Works
Project Monitoring Application
8 0.000 0.500 0.000 0.000 0.500
Tools
a.ERP Infra (Storage and Server
9 0.000 12.000 6.000 2.000 20.000
upgradation)
b. Upgradation of ERP & ISU to S/4
10 0.000 15.000 10.000 7.000 32.000
HANA Application
Oracle Licenses for set up of DR for
11 CRM application and 0.000 7.000 0.000 0.000 7.000
implementation
12 Upgradation of Video Conferencing 9.500 0.000 0.000 0.000 9.500
Implementation of Security
Operation Centre(SOC) & Security
13 0.000 5.000 3.000 0.000 8.000
Incident and Event Management
Sytem
Upgradation of Training Centres
14 0.000 0.000 3.000 3.000 6.000
with Training facilities
Total Excluding PMA Charges (INR
212.147 442.076 554.629 705.485 1914.337
Cr.)
PMA Charges @ 1.5% of the project cost (Modernization works) 28.71
Total Project Cost Inc. PMA 1943.05
FINANCIAL SUMMARY
(Rs in Crore)
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Targeted GBS by Counterpart Counterpart Counterpart Total Cost
Interventions GoI Fund Fund Fund Incl. PMA
Under (State (Loan From (Will be grant (In
RDSS_WB Govt.) ADB.) provided by Rs Crores)
WBSEDCL)
Distribution 3420.000 1036.650 3039.097 0.000 7495.747
Infrastructure
works for Loss
Reduction Incl.
PMA grant
Distribution 868.800 263.350 810.903 0.000 1943.053
Infrastructure
works for
Modernisation
Incl. PMA grant
TOTAL 4739.786 1750.986 3850.000* 2042.272 12383.044
(*1 USD=77 INR)
Estimated Project Cost And Funding Arrangement For RDSS Project Funding
Sr.
Year Amount (In Rs Crores)
No.
1 Phase I_FY2022 (10% of Project Cost) 1238.304
2 Phase II_FY2023 (20% of Project Cost) 2476.609
3 Phase II_FY2024 (30% of Project Cost) 3714.913
4 Phase II_FY2025 (40% of Project Cost) 4953.218
Total 12383.044
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8. PREPAREDNESS OF THE WBSEDCL FOR IMPLEMENTATION OF PROJECT
WITHIN TIMELINES
Sl. Aspect of Status Expected date
No. preparation
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Sl. Aspect of Status Expected date
No. preparation
Views of Group R
“The project is fundamentally outcome oriented and the terms of GOI speak about conditional
project funding based upon target achievement. The State will have bear around ?1751 crore in
five years and the rest of the funding will be received from GOI and through ADB loans. The state
funding also may be linked to performance on annual basis following the objective of the project
and to stress upon target accomplishment. Under the stated circumstances, we may, subject to
approval of the Cabinet and concurrence of Group N, and further stipulations on the phased
funding that the progress of the work should be reviewed by Power Dept. in a regular interval and
the State Government financial assistance will be released based on the work-progress and fund
utilization and the respective release from GoI, accord “in principle” approval to the proposal of
the Admn dept”
Views of Group N
“We may also have no objection to agree in principle to the proposal of Power Dept. for
implementation of the Revamped Distribution Sector Scheme (RDSS) to be implemented by
WBSEDCL as a Central Sector Scheme with a total financial involvement of Rs.12383.044 crore
till March,2026 with the following fund sharing pattern:
Loan assistance of the Asian Development Bank (ADB) (USD 500 million) = Rs.3850.000 Cr.
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Administrative Department may obtain approval from this Department in due course on the details
terms and condition of the EAP part of the project and details of the Central Sector Scheme under
which the project would be implemented. The progress of the work should be reviewed by the
Power Dept. in a regular interval on which the State Government’s financial assistance would be
released based on the progress of work and also utilization of fund and subject to approval of the
State Cabinet.”
PROPOSAL :
9. IMPLEMENTATION SCHEDULE:
9.1 Necessary Notification in this regard will be issued within one month from the date
of approval by the Cabinet.
9.2 Quarterly progress report on implementation of the project will be sent to the Cabinet
Secretary and Chief Secretary.
10. The matter is now placed before the State Cabinet for consideration and approval of the
proposal at Para 9 above.
***
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