“AIPEF has pointed out serious flaws in the bidding process of privatization of power distribution in UTs and has demanded that the ongoing bidding process be scrapped in the absence of central government’s clear-cut approved guidelines,” an AIPEF statement said.
AIPEF spokesperson V K Gupta claimed that the government is exploiting the crisis of the pandemic to put forth its policy of privatization of the power sector, and the draft National Electricity Policy 2021 that conflicts with the Electricity Act 2003 should be withdrawn.
In the case of UTs, no guidelines are issued by Government of India for competitive bidding under Section 63 of the Electricity Act 2003 for a distribution company.
This is a gross anomaly in the present case. As such before taking up the privatization of electricity distribution in any union territory, the policy and parameters of competitive bidding must be finalized.
Gupta said the Centre is pushing the competitive bidding of privatization of electricity wing of Chandigarh and Dadra Nagar Haveli Daman Diu.
Privatization of distribution companies is not allowed by competitive bidding when the competitive bidding guidelines are non-existent and have not been issued, AIPEF said.
Any bidding carried out with missing guidelines is against Electricity Act 2003 and should be cancelled, it argued.
The decision of the central government on May 12 last year that the distribution function in all the UTs should be privatized is an executive decision of the Home Ministry and this should not overrule the provision of Electricity Act 2003 in a matter relating to the privatization of electricity, it pointed out.
The “confusing and conflicting” policy is being adopted by different UTs in the absence of a clear-cut policy as standard bidding documents issued by the Ministry of Power in September last year has not yet been finalized, it stated.
In the case of Chandigarh, the parameter is 100 per cent equity sale, and in the case of Dadra Nagar Haveli Daman Diu, the bidding parameter is 51 per cent equity sale.
In Chandigarh, the commercial and domestic consumers are the main source of earnings for discoms as the agriculture load is less than 1 per cent, AIPEF noted adding that in both cases, it is high revenue, low loss system with financial surplus utilities.
This violates the present National Electricity Policy where “cherry-picking “is not allowed, it stated emphasising that privatization of such distribution assets should not be allowed.