‘Privatisation of discoms will lead to layoffs, staff reversion, higher rates’
The primary reason for UPPCL’s losses is the high cost of power purchases; UP generates only 5,000 mw of its 30,000 mw demand and the rest is bought from private entities at steep prices, says All-India Power Engineers’ Federation chairman Shailendra Dubey
The Uttar Pradesh Power Corporation Ltd’s (UPPCL) recent proposal to privatise its two most loss-making discoms — Dakshinanchal (Agra) and Purvanchal (Varanasi) — has evoked sharp reactions from employees’ unions that have launched agitations, demanding a rollback of the plan, while both sides present strong arguments. Shailendra Dubey, chairman of the All-India Power Engineers’ Federation and convenor of the UP Sanyukta Sangharsh Samiti, a coalition of 16 trade unions, shared his perspective on this contentious issue in an interview. Excerpts:
Q After a prolonged lull, the idea of privatizing electricity distribution has suddenly resurfaced in UP. How do you view this development?
A Privatisation of power in UP is not sudden. In April 2018, five cities (Ghaziabad, Meerut, Lucknow, Varanasi, and Gorakhpur) and seven districts were slated for privatisation, with tenders issued. However, protests led to a rollback. In September 2020, during Covid, Purvanchal Vidyut Vitaran Nigam’s unbundling and privatisation were proposed. Employees protested, and a written agreement with the cabinet sub-committee, led by ministers Suresh Khanna and Shrikant Sharma, ensured no privatisation would occur without employee consultation.
Q Why the opposition to reforms, and what are your apprehensions?
A This is not reform, but an imposition of a failed model. It will lead to mass layoffs, employee reversion, and higher electricity rates. Cherry-picking of consumers will also occur — favouring industrial and commercial users while neglecting subsidised domestic and agricultural consumers.
Q The UPPCL has issued FAQs twice seeking to address all the concerns. Your comment?
A The power corporation’s FAQs are misleading. We provided a point-by-point analysis, yet they have failed to respond.
Q UPPCL says it is not privatisation but a partnership with pvt cos with assets to be with the corporation?
A The rule is the same all over the world...when 51% equity will be of the private sector, then it is called privatisation and the entire management will be of the private sector and their policies will be implemented. This is what is happening in the country. By creating new definitions, power employees in UP are being befooled.
Q Unlike in earlier attempts, the management is assuring that private companies will take responsibility for both urban and rural areas, avoiding cherry-picking...
A In Odisha, Tata’s private company receives the annual subsidy in advance. Why can’t government discoms get similar treatment? Additionally, UP’s private company in Greater Noida provides minimal electricity to rural areas, a pattern also seen in Odisha.
Q What, according to you, are the main reasons for the UPPCL’s mounting deficit?
A The primary reason for losses is the high cost of power purchases. UP generates only 5,000 MW of its 30,000 MW demand; the rest is bought from private entities at steep prices. Delivery costs are ₹7.85/unit, yet domestic tariffs are capped at ₹6.50/unit. Mismanagement by IAS-led leadership over 22 years further exacerbates losses.
Q Why are Meerut, Lucknow and Kesco discoms doing better than the two discoms that are being privatised?
A Meerut’s discom, with industrial and commercial consumers, achieves higher recovery per unit. Kanpur Sangharsh Samiti challenged privatisation when Agra and Kanpur faced similar proposals. Today, Kanpur’s Kesco recovers ₹6.80/unit, whereas Agra’s Torrent Power pays ₹4.36/unit despite Agra’s industrial and tourism profile. This discrepancy cost of power corporation is ₹275 crore in FY23-24 and ₹2,434 crore over 14 years.
Q Can you deny rampant corruption in government discoms that often leads to consumer harassment? Private companies generally provide some relief in this regard.
A We do not shield any corrupt employees or engineers. However, large-scale electricity theft isn’t possible without the top management’s complicity.
Q It is said that a PIL pending in the HC is constraining leaders like you to intensify the stir. Do you see this as an impediment to making a call for a strike?
A We respect the judiciary and will honour its decisions.
Q How confident are you of the government giving in to the pressure by employees?
A Raising our voice democratically is not about pressuring the government, but exposing how bureaucracy misleads political leadership. We are confident of convincing the chief minister that, with employee involvement, UP’s power sector can become the country’s best. UP serves 3.56 crore consumers—the highest in India—and supplied 30,000 MW power, surpassing Maharashtra, due to its employees and engineers.
Q What is your proposal to the management?
A We propose handing over one poorly performing division to Sangharsh Samiti under conditions equal to private companies. If our performance doesn’t surpass theirs in a year, we’ll cease opposing privatisation.
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