By CL Jose
No buying passenger cars, expensive inaugural functions
THIRUVANANTHAPURAM/July 06-2022: Seemingly inspired by the commercially prudent steps that made better business sense for the company in the past one year, Kerala State Electricity Board Ltd (KSEBL) is moving ahead with innovative cost cutting measures “in view of the emerging [tough] financial situation.”
The new move will see deferable capital expenditure, purchase of passenger vehicles, avoidable cost-consuming inaugural ceremonies, new post creation, construction of office buildings etc being ‘put on the back burner’ for the next three years.
The chairman and managing director (CMD) of KSEBL, Dr B Ashok, had recently hinted that the company was on a turnaround mode and could close the financial year 2021-22 (FY22) with a decent operating profit, which has been eluding the state’s lone power provider since 2008.
He said the company could earn additional Rs1100 crore through the astute trading strategy followed by KSEBL in selling surplus power in the power exchange.
“Moreover, we were able to convert about Rs800 crore central loans into aids, thus taking it off from the company’s liability book,” Dr Ashok had said.
As a strategy to tide over the tough financial situation that has engulfed the system as a whole, KSEBL has proposed to undertake restructuring proposals over the financial years 2022-23, 2023-24 and 2024-25 with postponable or deferable costs on capital investment and other expenditures.
Referring to the financial quagmire the state is mired in currently, as explained by the Finance Minister KN Balagopal himself, a public finance expert told businessbenchmark.news, that the state could very well take a cue from KSEBL’s new move on austerity measures.
Keep it simple
The KSEBL’s expenditure curbs have included all inaugural ceremonies with expenditure conducted for projects/constructions with a capital outlay/expenditure of Rs3 crore or below.
“These projects may be merely opened with a cutting of ribbon by the chief engineer in charge of the project, and moreover, public functions and advertisements may be avoided,” the order noted.
Purchase of all passenger vehicles/passenger cars planned for officers/units will have to wait. Nonetheless, those for which orders are placed as on May 30,2022 could be proceeded.
Capital outlays
On the capital expenditure, the order has called upon the departments to reduce its capital expenditure by 15 per cent for the remaining financial year, though CSS/Externally aided projects will be addressed differently.
“The progress of the cost control measures will be reviewed closely on a quarterly basis by the director (Finance) and a report may be made available to the Full Board Meeting on the compliance status of the same,” the official note added.
