Articles

On Privatization of Chandigarh Electricity : Sukhdev Singh

August 25, 2021 04:59 PM

The process of privatisatiion of the UT electricity department, which started with the invitation of bids last year in the month of November, has reached near its final stage on 4th of August this year with the opening of bids . Now the report on the financial bids will be sent to the UT Administrator and then to the Ministry of Power for final decision to hand over the electricity distribution in the UT to the private company named Eminent Electricity Distribution Ltd. Being the highest bidder the Kolkata-based Eminent Electricity Distribution Ltd has stolen the show . The RP-Sanjiv Goenka Group flagship company is a subsidiary of CESC Limited. With the seven competitors -- Sterlite Power, ReNew Wing Energy, NESCL (NTPC), Adani Transmission Ltd, Tata Power, Torrent Power and Eminent Electricity Power Ltd - the company made the highest bid of INR 871 crore. But the amount does not match the total wealth and business of the UT electricity board. Moreover the board was providing satisfactory services to the consumers and earning profits.

At present, there are 2 lakh 47 thousand power consumers in the city. Out of these nearly 2 lakh 14 thousand are domestic consumers and the other 33 thousand are commercial, industrial small power, medium supply, large supply, bulk supply, public lighting, agriculture power and temporary supply consumers. The power supply in Chandigarh is relatively cheaper, the distribution is efficient and satisfactory. Above all this the department earns profits of INR 150 crores per annum. The 150 crores per annum earning electricity distribution system/ department will be handed over to the Goenka owned Eminent Electricity Distribution Ltd. for 781 crores. The Eminent Electricity Distribution Ltd will earn more than INR 150 crores per annum and will recover its INR 781 crores in 2-3 years.

But the bid does not end there: the properties, according to an estimate, of INR 6000 crores will also be handed over to the Eminent Electricity Distribution Ltd. just for INR 01 (one) as the lease money. The properties of the department that will include in the lease are 782 houses , 200 sub stations of different capacity, buildings, offices, machines and other infrastructure. The decision to privatize the department has been opposed by the UT power men union and some citizen groups. The union of the employees of the UT electricity department even filed a petition in the Punjab & Haryana High Court which stayed the action. But the UT administration got the decision in its favour from the Supreme Court.

Everything is legal and policy (privatisation) based and most of us look at it with the hope for better service and some with a feeling of inertia and helplessness. But the earlier we understand the future from the previous similar actions, the better it would be. We have the example of the outcomes of agreements with the private electricity producers in Punjab. The agreements have impacted the consumers negatively: the electricity is one of the costliest in Punjab.

A lesson giving example in the history is the similar action of privatisation of water distribution and its consequences in the City of Cochabamba in Bolivia. What happened in Cochabamba is taught as one of the popular movements in democracies. This is popularly known as ‘Bolivia or Cochabamba Water War’ It has lessons to learn as it is taught as a popular movement in the school curriculum of CBSE.

The background of ‘Bolivia Water War’ lies in the poor water management and distribution of water supply in one of the big city called Cochabamba in Bolivia. To resolve the crisis and for better distribution of drinking water, as was made to believe, the World Bank advised/ pressurized the government of Bolivia to lease out the water supply system to ‘Aguas del Tunari’, a subsidiary of the multi-national company (MNC) Bechtel, in September,1999. As a follow up, the next month the government passed an act on ‘regulation of water and sanitation’ justifying privatisation. The fall out of the privatization resulted in four times raise in the water bills and the people had to pay one fifth of the monthly income as the water bill. Some households without any water connection were also billed arguing that they were future beneficiaries of the scheme. So the existing water and irrigation systems and services were threatened under the new water distribution system.

Compelled by the circumstances the people of Cochabamba under the leadeship of human rights activists successfully organised the general strike for four days in January 2000 and the government agreed to negotiate on the new law. The strike was called off but the government backed out. When the agitation was resumed in February it was crushed by brutal repression by the police. The agitation was started in April again but the government imposed martial law. Yet the people continued their protest and forced the officials of the MNC to leave the city and forced the government to cancel the contract and restore the system of water supply by the municipality at old rates. The agitation came to be known as ‘Bolivia's Water War’ and the protesters as ‘Water Warriors’.

In the present case of privatization of the Chandigarh UT electricity department, the services in future are being put to risk unnecessarily as the department is working so well that it earns a handsome profit, provides good employment to its workers and serves the people satisfactorily; its transmission and distribution losses are less than the target of 15 per cent fixed by the Ministry of Power.

 

 

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