THE WORLD - News from July 12, 2009

It was still dark outside when a man in his underwear answered the knock at the factory door, releasing a wave of heat and gritty smoke from the noisy room behind him.

This, the man was told, was a power raid. The engineers storming past him were here to investigate electricity theft at this basement plastics mill.

The problem is rampant in India, but especially in New Delhi, a sprawling city of slums, factories, and politicians unaccustomed to paying for power. When private companies partnered with the government in 2002 to distribute the city’s energy, more than half the electricity generated was stolen.

Since then, the companies have fought to stop the theft, and officials say they are slowly winning.

In a country facing massive power shortages, fighting theft is an important way to make electricity distribution more reliable, officials say. Still, the shortfall is massive. In a nation of 1.2 billion, about 600 million people have no access to electricity, and those who do endure rolling blackouts that can last up to 12 hours. The demand is expected to grow by four to five times over the next 25 years, but the country’s antiquated power grids are already overwhelmed.

India’s energy deficit will be one of the most serious challenges facing Prime Minister Manmohan Singh as he begins his second term, and his administration is exploring nuclear, solar and wind power to address the gap.

This industrial block in west Delhi, home to a suspect plastics manufacturer, represents the front lines in the anti-theft fight.

Vikrant Seth, the private sector enforcement official leading the raid, hoped this would be a big one -- four police officers would accompany the team in case things turned violent, as they sometimes did.

Seth is one of the many people fighting block by block to clean up the system. It’s an unenviable task.

Many Indians have a long-standing reluctance to pay for power, dating to the era when the state controlled nearly the entire economy, including the energy sector, and securing a legal power connection could take a lifetime.

Power companies across the country lose an average of 40% of the power generated, according to a 2007 government report.

The situation was especially bad in New Delhi -- the same report called the capital’s state power company “a corrupt and inefficient monopoly” that offered “abysmally poor service.”

Many people illegally tapped into the neighborhood connection, betting that the authorities were too slow, or too corrupt, to stop them. The resulting cobweb of power lines helped push the capital’s electric company more than $3 billion into debt in 2002.

That year, subsidiaries of Reliance ADA Group and Tata Group, two of India’s most powerful conglomerates, entered a partnership with the government to distribute power in the capital and halt the losses. Reliance and Tata had impressive records in Mumbai, India’s largest city, where power losses are among the lowest in the country.

Through dozens of power raids every week, among other strategies, they have managed to dramatically reduce theft in Delhi. BSES, the Reliance subsidiary that handles two-thirds of Delhi’s power, has sent more than 650 people to prison and booked more than 114,000 cases in special courts that handle only electricity cases. By the end of last year, BSES, Seth’s employer, had cut theft to 28% from about 52% in 2002. Seth’s bosses want to bring that down to 10%.

Before dawn on a recent Saturday, Seth corralled his men to review details for the three raids planned for the morning. When his crew was ready, Seth hopped into a white van, part of a large convoy, and headed for the first target.

Inside the windowless plastics factory, an enormous, clanging machine spat out sheets of flimsy black plastic. Two scrawny men sat on the floor folding the plastic while a third slept in the corner.

A team of engineers checked the electric meters and inspected a cable sticking up from the ground while others headed to the attic to investigate suspicious wires hanging from the roof.

Nearly two hours after the raid at the plastics factory began, the technicians walked outside shaking their heads. They couldn’t prove that the factory was stealing power.

After signing sheets of paperwork, Seth climbed back into the van, not entirely convinced that the factory owner wasn’t stealing.

“We have to give him a clean chit,” he sighed. “We didn’t find anything. The conclusion is we don’t know.”

He closed the car door and told the driver to turn around. They had another address to raid.