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Serious flaws in the bidding process, no clearcut guidelines for privatizing power in UTs

VINOD GUPTA | May 26, 2021 05:43 PM

CHANDIGARH: All India Power Engineers Federation (AIPEF) has pointed out serious flaws in the bidding process of privatization of power distribution in union territories and has demanded that the ongoing bidding process be scrapped in the absence of central government clearcut approved guidelines.Privatization for the sake of privatization should not be carried out.

V K Gupta a spokesperson AIPEF said that the government is exploiting a huge crisis of pandemic to put 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the power sector and the draft National Electricity Policy 2021 that conflicts with the Electricity Act 2003 should be withdrawn.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 union territories, these are no guidelines issued by Govt. of India for competitive bidding under section 63 of 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 that the central government is pushing the competitive bidding of privatization of electricity wing of UT 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. Any bidding carried out with missing guidelines is against Electricity Act 2003 and should be canceled.

The decision of the central government on May 12 last year, that the distribution function in all the union territories should be privatized is an executive decision taken by Home Ministry and this should not overrule the provision of Electricity Act 2003 in a matter relating to the privatization of electricity..

The confusing and conflicting policy is being adopted by different union territories in 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 to date.

In the case of UT Chandigarh the parameter is 100% equity sale, and In the case of UT Dadra Nagar Haveli Daman Diu the bidding, the parameter is 51% equity sale amount. In the case of Chandigarh, the commercial and domestic consumers are the main source of earnings as the agriculture load is less than 1 %.

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. The privatization of such distribution assets should not be allowed. The national assets should not be transferred to private parties at Rs. one value.

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