Sucheta Dalal :Power bonanza (7 Dec 2003)
Sucheta Dalal

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Power bonanza (7 Dec 2003)  

The new Electricity Act is providing conclusive proof that electricity shortage is mainly due to distribution mismanagement. A steel unit in Maharashtra’s most power starved region, who advertised for long term power supply bids was surprised to get over 40 responses on the very first day. More interestingly, PSU giants such as NTPC, Power Trading Corporation (PTC) and a Himachal Pradesh based hydel power generator were willing to offer the best rates. While PTC offered a power trading agreement at the best rates, the wind and hydel power companies were offering a rate of well under Rs 2 per unit minus evacuation and wheeling charges. All this is good news for corporate India, it spells doom for government owned distribution utilities and could be disastrous for domestic consumers who do not have any bargaining clout with power generation companies.

Look, no bills!

A Reliance Infocomm recently asserted on television that it had sorted out all its billing problems. But users continue to insist that they have received no bill or have received wrong bills. Some of their stories are very amusing. One user, who was not billed for months received a call asking if he had paid up. When he asked about the bill, he was sheepishly told to go to the nearest Web World and pay up. “You could probably get a duplicate bill there” said the caller. Another corporate user, on a deeply discounted tariff plan hasn’t been billed in seven months. But another user who used the phone mainly for Internet connectivity was told to cough up a hefty deposit after just 11 days because he was allegedly a ‘heavy user’. Most users are worried about being suddenly slapped with fat bills that they cannot suddenly pay up. But they are equally clear that they will simply ditch the phone if the bills are unreasonable. Clearly, the company has a long way to go before it sorts out its billing mess. But what remains a mystery that Reliance Infocomm’s claims of a cash breakeven, although it seems to have trouble remembering to collect cash.

The ‘Oops’ factor

The New York Times reports that a new ‘economic spectre’ of the new millennium is ‘stealth inflation’. In an article titled: Checking your bill for a new charge called ‘oops’, it says “phone companies and just about anybody else who sends you a bill manages to extract more money from you without actually raising their rates” through newly concocted charges such as fees for ‘handling’, ‘restocking’, ‘regulatory assessment’ etc. Such fees are expected to generate $100 million for hotels this year, $2 billion for banks, $11 billion for credit-card companies —and an average of 20 per cent extra on every phone bill. Phase II of such stealth inflation are the billing ‘errors’ that crop up in bills. Invariably, they over-bill customers because a majority of users don’t scrutinise statement and simply pay up, or because the need to ‘turn into human pit bulls’ to have errors rectified. The NYT says that such overbilling could be part of a deliberate policy because only a small percentage of users notice the errors or complain. Companies deny these charge most vehemently. But the theory is bound to strike a chord among Indian consumers using modern electronic banking, mobile phones, Internet services, on-line trading systems or even depository accounts who routinely complain about billing problems and various charges collected from them.

Speed-ing trouble

Do expensive fuels with additives going under brand names such as Speed really help your vehicle? Those who fork out extra money for what they think is better fuel are in for a surprise. The Honda Motor Company in India clearly tells users to use plain unleaded fuel, but consumer activist Veeresh Malik took the investigation to a conclusion. In response to his letter, Maruti Customer Care said that it has no specific test reports on the advantages/disadvantages of using fuel additives and that it would not be fair for it to comment on the issue. But it conclude —“it is advisable to use the normal unleaded fuel in your vehicle”. The makers of the fuel additives vaguely say that all OEMs ‘favour’ branded fuels as it helps the vehicle. While this is not my experience or that of Malik, the company quoted Hyundai and an article on its website as an endorsement. But the article only seems to say that since normal fuel has impurities, it is better to use a branded fuel with additives. But Malik checked with the authorities and found that none have any quality standards specifications, nor are they required to declare the composition of their additives. A furious Malik wonders why oil companies are not forced to supply clean fuel and why they are allowed to market expensive alternatives and make more money.

-- Sucheta Dalal