India's capital city fights black-outs

Power cuts can deter foreign investment

Private companies have won access to India's electricity distribution business in Delhi for the first time.

Delhi's state utility is to hand over the power distribution business after losing millions of dollars and plunging the capital into frequent black-outs.

Frequent power cuts will soon be history in the Indian capital

Firdose Vandrevala
Tata Power

India's power supply problems are seen as a serious deterrent to foreign companies setting up business there.

Some multinational firms like Siemens and Motorola have their own power generation plants in order to ensure supply, adding to operational costs.

"Frequent power cuts will soon be history in the Indian capital," promised Firdose Vandrevala, a top official of Tata Power, one of the companies which will now distribute power.

Siphoning off power

"Consumers will gradually feel the difference," said New Delhi Power Minister Ajit Maken.

New Delhi's State Electricity Board has been losing 12 billion rupees ($250m; £163.3m) a year because of theft and has been forced to start selling off parts of its business to compensate.

Hundreds and thousands of homes, predominantly in shanty towns, steal electricity by hooking on to overhead cables.

And the electricity board says nearly 1.5 million electricity meters are tampered with or worn-out.

This has led to an over-loaded network and the ensuing black-outs.

About a quarter of electricity generated in the country is thought to be lost in transmission and distribution.

Power distribution will now be handled by Tata Power and Bombay Suburban Electricity Supply, while the state utility will continue to generate power.