Kerala faces huge financial burden if smart meter project is implemented through KFON

Kochi: It is estimated that the Kerala Government will have to bear an additional expense of Rs 20,000 crore if smart meters are installed through Kerala Fiber Optic Network (K-FON). 

However, if the state government refuses to incur the expenditure, it will rest on KSEB. Furthermore, KSEB will have no choice but to raise electricity tariffs to generate additional revenue to pay off the massive liability. 

The Kerala Cabinet decided to chalk out an alternative plan to implement the smart-metre project instead of going forward with the TOTEX (Total Expenditure) model put forward by the Center. However, Electricity Minister K. Krishnankutty cautioned that this decision will prevent Kerala from obtaining Rs 9191 crore in central funding for the project. 

K-FON has so far laid 24,000 km of optical fibre cable at an estimated cost of Rs 1528 crore to provide affordable and better broadband connectivity to households in Kerala. 

In the first phase of the project, KSEB plans to install smart meters for all industrial establishments in Kerala. In that scenario, K-FON will have to lay optical fibre cables alongside 3 lakh kilometres of low-tension lines of KSEB. However, such a project would cost at least Rs 20,000 crore.

It is worth noting that K-FON plans to lay cables only for 24,000 km to provide internet connectivity. To incorporate the smart-metre project, K-FON will have to devise a new plan and make significant changes to its present endeavour. 

However, KSEB fears that such a move will eventually become their liability. To avoid this, the state government may have to undertake this responsibility.