A pre-bid meeting of entities interested in the privatization of power distribution of the Union Territory of Chandigarh is expected to be held soon, media reports suggest.
So far, around 17 entities have purchased the request for proposal (RfP) documents and a pre-bid meeting between them and the UT Administration is scheduled to be held on January 29, 2021. Firms interested include: CESC, Torrent Power, Sterlite Power, Adani Transmission, Tata Power, GMR Group, India Power Corporation, DNH Power Distribution Corporation and NTPC Electric Supply, among others.
Stay vacated: It may be recalled that on December 1, 2020, the Punjab & Haryana High Court issued a stay on the Centre’s proposal to privatize power distribution in Chandigarh. This was done by admitting a plea submitted by UT Powermen Union, Chandigarh. The court felt that the privatization was “unjust and illegal” for several reasons. However, the Supreme Court recently vacated the stay, paving the way for the process to resume.
In early November 2020, the EWEDC floated the invitation for bids from potential entities to acquire complete control on Chandigarh’s power distribution. The Electricity Wing of Engineering Department of UT Administration of Chandigarh (referred to as EWEDC) is a deemed licensee under Section 14 of the Electricity Act 2003, and is carrying out the business of transmission, distribution and retail supply of electricity in Chandigarh.
By original thinking, the process of privatization was to complete by January 15, 2021.
The incumbent private player will need to bring down aggregate technical & commercial (AT&C) losses to 7.6 per cent over the next five years, from the currently estimated 9.3 per cent for FY21.
Media reports further suggest that the Chandigarh UT has proposed to set up a new company that would incorporate the power distribution activities of the UT. This entity will then be taken over by the incumbent distribution licensee. As a finer point, a trust would also be created to manage the pension obligations of existing employees (who will be government employees before the takeover) after they move to the new private company.
The privatization of power distribution in Chandigarh UT is in line with the Union power ministry’s plan of May 2020 to privatize power distribution in all Union territories, in a phased manner. Chandigarh is the first on the block. The process is being extended to Andaman & Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu, Puducherry, Jammu & Kashmir and Ladakh.
Featured photograph (sesainfotech.com) shows the “Open Hand”, Chandigarh’s official emblem, designed by Swiss artist Le Corbusier, in the late 1940s.