Privatisation of power distribution in UTs to hit consumers hard: AIPEF

Engineers’ body says Central government grossly misleading the public by saying that electricity would be cheaper after privatisation

The All India Power Engineers’ Federation (AIPEF) has criticised the Union government’s decision to privatise electricity distribution in the eight union territories (UTs), including Jammu and Kashmir, Ladakh, Chandigarh and Puducherry, amid the Covid-19 crisis.

The Centre was also looking to abolish the subsidy and cross-subsidy in electricity supply, which would make the commodity more expensive for general consumer categories and cheaper for industrial consumers. (HT PHOTO)

Union finance minister Nirmala Sitharaman had said on May 16 that power distribution business in the UTs would be privatised as a step towards enhancing private investment in power distribution companies (discoms).

VK Gupta, spokesperson, AIPEF, said the government considered the lockdown as an opportunity to privatise the power departments of the UTs by bypassing public opinion and not giving any time to stakeholders to debate the matter.

The power departments of the UTs had been forced to appoint consultants and complete the process during the lockdown period, he added.

Chandigarh unit making profits

Calling the move unnecessary as the Chandigarh electricity department was a profit-making utility with very low transmission and commercial losses, Gupta said the Central government was grossly misleading the public by saying that electricity would be cheaper after privatisation.

Private discoms were only allowed to take a minimum of 16% profit, which would push the power tariff to almost Rs 8 per unit for consumers, he said.

The Centre was also looking to abolish the subsidy and cross-subsidy in electricity supply, which would make the commodity more expensive for general consumer categories and cheaper for industrial consumers.

The draft amendments to the Electricity Act, 2003, were made public in April with a proposal for private participation in electricity distribution.

States, others had no say in the matter

It was rushed through, Gupta said, so that no stakeholders, especially the states, would be able to oppose it in the middle of the Covid-19 crisis.

Calling the draft Electricity (Amendm