Supreme Court clears decks for power privatisation in Chandigarh
Supreme Court clears decks for power privatisation in Chandigarh

Supreme Court clears decks for power privatisation in Chandigarh

Apex court put on hold the stay given by the Punjab and Haryana high court for privatisation of the Chandigarh electricity department
By HT Correspondent, Chandigarh
PUBLISHED ON JAN 12, 2021 11:34 PM IST

The Supreme Court on Tuesday put on hold the stay given by the Punjab and Haryana high court for privatisation of the Chandigarh electricity department, thus clearing the decks for the administration to go ahead with the process.

Confirming the development, UT adviser Manoj Parida said: “Power privatisation will be put on fast track now.”

The bench of justices S Abdul Nazeer and Ajay Rastogi was hearing the Chandigarh administration’s plea against the stay. The detailed order is awaited. The next date of hearing is February 5.

The high court bench of justices Jitendra Chauhan and Vivek Puri had stayed the process on December 1 on the plea of UT Powermen Union, a worker’s collective that had challenged the move to privatise 100% distribution and supply functions of the electricity wing of UT’s engineering department.

The decision to privatise the department was taken on May 12 after directions from the Centre. An empowered committee was constituted to oversee and implement the process, and the administration had assured the Centre that it would be completed by the end of 2020.

As many as 17 firms, including Adani Transmission Limited, Tata Power Company Limited, GMR Generation Asset Limited, NTPC Electricity Supply Limited and Sterlite Power, have also expressed interest after the administration on November 9 invited bids.

The union had sought quashing of the decision to privatise the department and subsequent process of tendering initiated by the administration.

What were powermen’s objections

The HC was told 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. As per Section 131 (2), the power department cannot be transferred to a totally private entity with no stake or control of the government at all, the court was informed.

The department is running into profits and its revenue has been surplus for the past three years, the high court was told, adding that the current system is economically efficient with transmission and distribution losses less than the target of 15% fixed by the power ministry.

It was pointed out that the transfer scheme has been prepared without calling for objections from all stakeholders — neither employees nor consumers. “In the absence of an advise from the advisory committee to the Joint Electricity Regulatory Commission (JERC) and without there being any recommendation of the JERC to that effect, privatisation of electricity wing of UT is not sustainable in the eyes of law,” it has been argued in the high court.

How will it affect you

A senior UT official said that the electricity department caters to a city with relatively low demand of around 400MW. As there are only 2.3 lakh consumers, if privatised, the efficiency is expected to improve, specifically of the distribution of power, he said.

On the fears of privatisation leading to power tariff hike, UT adviser Manoj Parida said: “Joint Electricity Regulatory Commission will ensure reasonable tariff.” In fact, JERC will continue to fix the tariff for the private sector operator as being done for the power department

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