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Jolt to Chandigarh as Centre pulls plug on smart grid project
Union ministry of home affairs decides not to spend more money on Smart Grid project as Chandigarh’s power dept is being privatised
Over four years after the administration started installing smart meters as part of the pilot of its ambitious Smart Grid project, the Union ministry of home affairs (MHA) has dropped the project for the rest of the city in the wake of the UT power department’s privatisation.
Under the Smart Grid project, approved by the National Smart Grid Mission (NSGM), the UT administration had planned to install smart electricity meters across the city by the end of 2022-23 fiscal as part of power sector reforms.
The smart meters were aimed at eliminating tampering of electricity meters, besides keeping a track of load, voltage, outages, peak demand, power consumption and tripping of power lines, making the system beneficial for both the electricity department and consumers.
In another benefit for residents, the smart meters would have allowed advance payment of bills, based on expected consumption.
Since 2019, as part of the pilot, UT has already spent ₹28 crore on installation of 24,000 smart power meters. The MHA had even approved ₹241 crore to take the project further, but it has now scrapped it.
In a review meeting held on Tuesday, the ministry stated that since Chandigarh’s electricity department was being privatised, there was no need for the government to spend any more money on the project.
UT chief engineer CB Ojha said, “The ministry has decided to do away with the project as the power department has been privatised. Now, it will be up to the private firm to continue the project or not.”
In the first phase of the Smart Grid Project, in October 2018, the electricity department had allotted the work for installing smart meters in Sectors 29, 31, 47 and 48, and seven villages — Faidan, Ram Darbar, Hallomajra, Raipur Kalan, Behlana, Makhanmajra and Daria — and the Industrial Area, where 24,000 meters have already been installed.
Privatisation process on
The administration is in the advanced stages of the department’s privatisation.
It was on January 7 that the Centre had given its nod to the UT administration’s proposal, paving the way for the department’s transfer to private hands.
UT had selected Kolkata-based industrial and services conglomerate RP-Sanjiv Goenka (RPSG) Group after the firm quoted the highest bid – ₹871 crore against the reserve price of ₹175 crore – for takeover of the services.
The department will be bundled into a company and its shares transferred to the company.
But the privatisation process has been entangled in legal battles since the UT Powermen Union approached the Punjab and Haryana high court against UT’s move, which also elicited criticism from Resident Welfare Associations and opposition parties amid fears of significant increase in tariff.
The HC stayed the process on two occasions. But the Supreme Court intervened and, on both occasions, vacated the stay. The union is of the view that the administration is selling 100% stake of the government in the absence of such a provision under Section 131 of the Electricity Act, 2003. Another argument is that despite profits and surplus revenue for the past three years, the department is still being privatised.
An ensuing strike by the powermen had resulted in widespread power disruption in Chandigarh on February 22 and 23, 2022, prompting the court to take suo motu note of the issue.
Subsequently in March, the UT administration had undertaken before HC that till the time the matter of power privatisation is pending before the court, it will not issue the letter of intent (LoI), declaring preliminary commitment, to the private company.
