Kochi: Kerala State Electricity Board 's (KSEB's) spiralling employee cost has left the chairman and members of the Kerala State Electricity Regulatory Commission (KSERC) divided. This has happened when KSEB had approached the commission for the permission to 'true up' its financials for FY13. Truing up is the accounting adjustment done to the revenue and expenditure accounts of a firm to reflect the actual figures, rather than the original estimates, which might be high or low.KSERC chairman T M Manoharan made a dissenting view in commission's latest order released on Wednesday, saying that there is no reason to approve the excess employee cost for FY13. It is understood that Manoharan, who was once the KSEB chairman, had been insisting on the utility improving its efficiency through means like computerization, before demanding for approval of a higher employee cost.Currently the KSEB's 750 sections have 3-4 metre readers with a monthly target of 1,500 readings and their readings are physically keyed-in by others. Once personal digital assistant is used, the total number of employees required for billing will come down by 2,500. "Another troubling factor is the idling of 2,000 civil wing engineers. If KSEB could take up consultancy works, majority of them could be deployed there. HLL Lifecare is doing this - they are building a medical college at Guwahati and has taken up another project in Punjab," said a source.Instead of pruning employees, KSEB went on a hiring spree. Between FY10 and FY13, the board recruited 6,669 employees across 15 categories. "In the recent years, average salary levels also went up. There are peons and drivers drawing Rs 1 lakh per month," the source said.In his order, Manoharan had noted, "...there is no reason to approve the employee cost in excess of the amount of Rs 1,663.66 crore as approved in the ARR order of the commission dated 28-4-2012. It is made clear that this is only a minority order. The majority order by the learned members will prevail over this order". The majority order of the other two members - K Vikraman Nair and S Venugopal - was against this and thus the commission passed KSEB's demand for adjusting the employee cost component in its financials.During FY13, KSEB's revenue gap had grown to a whopping Rs 3,998.89 crore, from Rs 1,889.16 crore it had originally estimated in its aggregate revenue requirements (ARR) submitted to the commission. While much of this mismatch, Rs 2,191 crore, is attributed to the purchase of power at the current market rates, an 'uncontrollable' item, a shortage of Rs 439.37 crore happened due to high employee cost, a 'controllable' component of expenditure.Employee cost accounts for nearly 30% of the annual tariff revenues of KSEB. Looking from the angle of 'employee cost per unit of input energy', KSEB has this ratio of 1.06, which is one of the highest in the country, while most of the other agencies - 48 of them - has a ratio below 1.The major component of employee cost overrun was salaries. According to ARR estimates for FY13, it was Rs 426.23 crore, but actuals grew to Rs 739.38 crore, an increase of Rs 313.15 crore. The remaining components - DA, provision for pay revision, other allowances, overtime and earned leave encashment - together accounted for remaining cost overrun of Rs 126.21 crore.

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