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Is privatisation the way forward?

india Updated: Nov 29, 2011 01:14 IST
Deevakar Anand

The city is reeling under power crisis and the existing distribution company (discom), Dakshin Haryana Bijli Vitran Nigam (DHBVN), has not been able to plug the gaps and ensure a successful distribution mechanism.

A lot has been done for privatising electricity distribution on the pattern of the national capital, where the North Delhi Power Limited (NDPL) and Anil Ambani-owned, BSES have taken over the task from Delhi Vidyut Board in 2002.

More than a year ago, leading consultancy firm CRISIL was roped in to engage private firms for power distribution in Gurgaon and Panipat. But, owing to the strong resistance from the state-owned power companies' employees, it could not take off. "As Gurgaon has lot of rural population, it is a question of vote bank for the government which will not favour a power tariff hike which is imminent if private discoms take over," said Colonel Ratan Singh, president of the Joint Action Forum of Resident Associations in Gurgaon (JAFRA). Singh is in favour of privatisation of distribution and the process should be taken up gradually.

To begin with is to opt for the franchisee model, under which the DHBVN will let out operations to private firms rather than allowing private discoms to take over.

DLF had floated the idea of taking over private distribution in its four residential phases, which could not get an approval. The first thing that any private discom will have to do is to revamp the old distribution network.

Federation of All Residents Welfare Association (FORWA) president Dharam Sagar opposes the idea vehemently and cites the "irrational" tariff hike in Delhi by NDPL and BSES. "Private discoms collude to dominate and jack up the tariff. With DHBVN, we can still raise our voice and get things done through the government, whereas private firms won't listen," he said. Sagar added, "The existing mechanism is quite capable of delivering, if the higher ups in the organisation want to do it sincerely."