By V.K.Gupta
The central government is making desperate attempts to privatize all public power utilities which is disastrous for the energy sovereignty and security of the country. The current emphasis of the government is on privatizing the complete power distribution system.
It seems that the agenda of the government of India and state governments is to hand over the entire power sector of the country to the private players which is not only disastrous for the country but also for the main stakeholders, consumers and employees. However, the World Bank report finds no significant difference in the efficiency scores between public and private providers.
Last month , the Prime Minister said in a conference that private houses have made extraordinary achievements in the field of renewable energy. Now the central government will provide all kinds of assistance to the states to privatize in the field of power distribution including nuclear power.
The Union Power Minister said that states have sought help from the central government for privatization of distribution corporations and the center is ready to help. The central government claims that power distribution corporations will be privatized which are not increasing the tariffs .
All these developments clearly show that the central and state governments are intent on privatizing. If the Government says loss making Discoms are to be privatized then why profit making Chandigarh Power Department has been privatized. Chandigarh electricity department was running in profit and was handed over to a private company despite stiff resistance from employees and Resident Welfare Associations. Now , the power privatization process has started in Uttar Pradesh with two power distribution companies (Discoms ) covering 42 districts of state.
The process of privatization in the field of transmission is going on very fast inside.. All the new sub -stations of transmission are going to the private sector. In the name of asset monetization in transmission, privatization has took a fresh entry. The transmission corporations are running in profit, they are also being privatized.
In Rajasthan privatisation of the power sector is going on at a very fast pace . . The transmission system of the state has been given to Power Grid as a joint venture, one third of 132 KV sub-stations have been handed over to contractors. 4 franchisees are already existing in the state power distribution. Now joint ventures are being done to hand over state thermal plants to the private sector.
When it comes to providing cheap electricity to consumers, the most important point is the generation cost of electricity. It is a fact that the state generating companies have the lowest generation cost .The electricity that the states have to buy from the private sector is the most expensive. There is a need that the state generating companies should be further strengthened so that they can be successful in providing cheap electricity to Discoms and the common consumers.
In the last two decades the central government made efforts to pass the Electricity (Amendment) Bill leading to privatization of the power sector but could not succeed after strong opposition by employees and engineers. There is no need for any amendment in the Electricity Act 2003 to provide better electricity supply to the consumers but the government’s will power to take reforms in the right direction.
Electricity is in the concurrent list of the constitution where the central and state governments have equal rights in the field of electricity. Especially in the field of power distribution, the work of power distribution is the responsibility of the states.
Privatization has led to massive tariff hikes in states where private corporate houses are operating, proving that private companies operate purely for profit. Electricity is not just a commodity; it is a basic necessity of people. Privatization will adversely impact consumers, farmers, industries, and employees, while benefiting only private corporations. Electricity is a public service and not a business opportunity..
Power utilities financial stress is due to mismanagement, political interference, and failure to recover dues, not public ownership. Thousands of power engineers, linemen, and staff face job insecurity and unfair treatment under privatization.
There is no need for any amendment in the Electricity Act 2003 to provide better electricity supply to the consumers. The Electricity Act 2003 has all such provisions through which better and cheaper electricity can be supplied to the general public.
For reforms in the power sector , expert power engineers should head the power utilities in the country. To make the energy sector strong and self-reliant, expert power engineers should be posted in top management positions in all power corporations of the country.
The experiment of privatization of the entire power distribution sector in the country has completely failed. The failed experiment of urban distribution franchise and privatization of electricity distribution should now be stopped and the way for better electricity supply should be paved by strengthening the government sector electricity distribution companies.