AIPEF for performance audit of privatised power assets

| | Lucknow
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AIPEF for performance audit of privatised power assets

Monday, 02 September 2019 | PNS | Lucknow

The power employees of the public sector power distribution companies have demanded performance audit of the privatised power assets in India and their adverse impact on the financial health of commercial banks.

Making a case against the alleged discreet privatisation of power utilities and channels, the All-India Power Engineers Federation (AIPEF), representing nearly 1.5 million technocrats from the sector, said an independent evaluation of the performance of privatised assets, their impact on consumers in terms of cost burden and customer service, and financial burden on banks was the need of hour.

AIPEF chairman Shailendra Dubey also criticised the alleged arm-twisting tactics of Union Minister of State for Power RK Singh, who, he claimed, had warned state power distribution companies (discoms) that they would have to hand over electricity supply business to multiple-supply licensees or franchisees in order to get Central government assistance or loans from Power Finance Corporation (PFC) and Rural Electrification Corporation.

Claiming that urban power distribution franchisees had met with a fiasco, Dubey noted that since electricity was a concurrent subject, the Centre could not dictate terms to state governments.

“Almost every franchisee, which had undertaken ‘creamy city areas’, has failed in different states, to deliver power to consumers and ultimately the state power discoms had to take their systems back,” he said.

Citing the example of the failure of the private franchise, he said a franchisee in Nagpur had expressed inability to operate and asked Maharashtra discom to take over distribution. Franchisees in Aurangabad, Jalgaon, Gaya, Muzaffarpur, Bhagalpur, Gwalior, Sagar and Ujjain have also failed, Dubey claimed, adding that in other places, franchisees regularly default in making payments to discoms.

“The Power Minister is talking of franchisee on one hand and on the other, the Government of India has formed a joint power distribution company consisting of NTPC and Power Grid, which have no past exposure to power distribution,” he underlined.

The AIPEF had earlier also opposed the proposals of federal policy think-tank NITI Aayog, which in its strategy paper, had dwelt on privatisation of power distribution in urban areas and introduction of franchisee system in rural areas.

Dubey said NITI Aayog’s strategy paper had essentially highlighted those points that were part of Electricity (Amendment) Bills, 2014 and 2018. These bills lapsed after they could not be passed in Lok Sabha during the Narendra Modi-I regime.

In its paper, the NITI Aayog had proposed privatisation of state discoms and/or the use of franchisee model to reduce AT&C (aggregate technical and commercial) losses in the domestic energy sector.

The NITI Aayog had also said discoms could adopt a franchise model for their retail business in rural areas and stipulate a minimum level of performance parameters, including the use of decentralised generation sources and storage systems for local reliability and resilience.

On its part, the AIPEF opined that ‘experiments’ of privatisation and franchise models had failed in India.

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