Centre sets ball rolling for privatisation of discoms

| | Lucknow
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Centre sets ball rolling for privatisation of discoms

Thursday, 24 September 2020 | PNS | Lucknow


The Union government has set the ball rolling for privatisation of state-owned power distribution companies by finalising Standard Bidding Document (SBD) and uploading it on its website.
This will be a guiding document for states looking to offer discoms to private companies.  All stake holders could send their comments to the Union Power Ministry by October 5.
This is for the first time that the Centre has drafted guiding SBD for discom privatisation. It is in line with the Centre’s efforts to improve operations and finances of discoms in various states.
In 2019, the Union Power Ministry had suggested several private franchise models to the states for power distribution.
The SBD contains the format for request for proposal, share holding agreement, share acquisition agreement, policy directions and bulk supply agreement.
The discoms in states, particularly in UP, have been financially beleaguered for the last 20 years.
Three reforms schemes initiated by the Centre in the past, Financial Restructuring Plan (FRP) during the United Progressive Alliance regime and UDAY (Ujjawala Discom Assurance Yojna) I and II  by the Bharatiya Janata Party regime failed to revive the power discoms, forcing the Centre to look for privatisation.
There is a federal structure in the Indian power sector, where power distribution is a state subject and the Centre has a guiding role. However, power generation and transmission come under the Central government. 
In May, under the Atmanirbhar package, the Union government had announced that power distribution in all Union Territories would be privatised. Currently power distribution has been privatised in a few cities — Delhi, Mumbai, Agra and Ahmedabad.
Meanwhile, All India Power Engineers Federation (AIPEF) threatened to proceed on indefinite strike against the Union government move.
AIPEF chief Shailendra Dubey said, “In fact, we are preparing for an indefinite strike. The Union government wants to privatise power discoms in the country and even healthy distribution companies making profit have been proposed to be privatised. This is unacceptable. The Centre wants to impose its will on all states and arm-twist state governments to fall in line.”
Dubey added, “The condition of implementing reforms in the power sector has been imposed by the Centre for availing benefits of Rs 20 lakh crore relief package announced by the prime minister in May.”
The AIPEF chief further said that power was a state subject and the Centre could not impose its views on states. He said that the UP government was working on privatisation of Purvanchal Power Distribution Company and power employees would fight against the move.

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