While the Punjab & Haryana High Court has stayed the privatization process of Chandigarh’s electricity distribution, media reports suggest that the Centre might appeal against the ruling.
The Punjab & Haryana High Court, it may be mentioned, has 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.
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.
The court felt that EWEDC was not making financial losses for it to be entrusted with private sector ownership. Besides, all stakeholders concerned were not involved before the notice inviting bids was floated, the court said. Most importantly, the UT Powermen Union argued that complete privatization of power distribution (with no equity held by the government) violated provisions of the Electricity Act.
It may be recalled that in early November 2020, the EWEDC floated the invitation for bids from potential entities to acquire complete control on Chandigarh’s power distribution. (Read more).
It is further learnt that at least ten companies including Tata Power, CESC and Adani Group showed interest in the Chandigarh privatization move. The bids were scheduled to close by December 31, 2020 and the discom was to be handed over by January 15, 2021.
The issue will now come up for hearing within six months of the Punjab & Haryana High Court resuming normal operations.
Centre’s plan
The Union power ministry in May 2020 planned to privatize power distribution in all Union territories, in a phased manner. Chandigarh was the first on the block. The process would be later extended to Andaman & Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu, Puducherry, Jammu & Kashmir and Ladakh.
Consultants
Deloitte has been mandated to help with the sale process to privatize discoms in the three UTs of Chandigarh, Puducherry and Andaman & Nicobar Islands; while SBI Capital Markets has been entrusted with Dadar & Nagar Haveli, Daman & Diu, Jammu & Kashmir, and Ladakh.
Featured photograph (source: chandigarh.gov.in) shows the organization of Chandigarh in well laid-out sectors.
