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VOICE OF ELECTRICITY WORKERS
Editorial
Stop Power Sector
Privatisation
The NCCOEEE had to organize a big protest march to Parliament on 1st of March
2006 against the undue delay in resuming discussions as promised by the power
minister in his letter dated 17th May 2005, about the power reforms.
In his letter it was stated that “during the next six months the government of
India shall continue the process of review of the provisions related to
reorganization/restructuring of the SEBs in the Electricity Act, 2003 based on
the status and impact of its implementation so far”.
It was promised as shown above that the government will take steps to resume
discussions and review the experience of the power sector within six months. But
they did not do so, instead continued their policy of power sector privatization
especially in the distribution sector, through their executive orders imposing
conditions for obtaining central assistance.
The latest example of this can be seen from the notification of the government
of India, the following are among the conditions required to be fulfilled in
order to obtain mega power project status:
1. The power purchasing state has constituted the regulatory commission with
full powers to fix the tariff.
2. The power purchasing state undertakes in principle, to privatize distribution
in all cities in that state each of which having a population of more than one
million, within a period to be fixed by the ministry of power.
The above suggested provisions were questioned in the 138th SRE Board held on
30th August 2005 at Chennai.
They observed “the rational behind linking of generation capacity addition with
privatisation is not understood, as it will not serve the intended reform
purpose of quick mega capacity additions. On the contrary, it only impedes
generation addition. Further, it must be pointed out that the objective of power
sector reform is not privatization, but reliable power supply at affordable
costs for all categories of consumers. This objective can be achieved through
the public or private sector, as the case may be”.
And finally they have requested that “ privatization of distribution should
immediately be removed as a precondition for accordance of Mega project status
and clearance to NLC&NTPC joint ventures of TNEB at Tuticorin & Ennore
respectively be accorded on priority.”
It is no surprise that the government of India’s reaction (communicated by Jt.
Secretary, Power vide his D.O.No. A-118/2003- 1PC (Vol.II) dated 13th February,
2006) on the above suggestions is as reproduced below from their letter to the
Chairman KeralaState electricity board, para 3rd of the letter is quoted below
“ 3. In view of the above, you would appreciate that the pre-condition of
calling upon the state government to undertake to privatize distribution in
cities having population of more than one million, was approved by the cabinet
keeping in mind the concerns of the Financial Institutions and project
developers who desire a stable and financially viable distribution system for
payment security.”
The stand taken by the government for distribution privatization to ensure
payment security has been shattered with the latest experience in the Orissa
state where the biggest private corporate company of India, the Reliance, had
undertaken power distribution sector through their three companies in Orissa
state. But Reliance had miserably failed to make payments towards electricity
purchase to Gridco, Orissa (Govt. undertaking) and have defaulted payment of
more than 1814 crores of rupees. Finally the Orissa state electricity Regulatory
commission had to order take over of the distribution system by nominated
special officers for each of them. We do not wish to narrate the experience of
private distribution system in Delhi etc.
However on 10th of March 2006 we had a discussion with the power ministry. After
detailed discussion it was decided to resume the discussion after 1st of June
2006.
The electricity employees and engineers should be vigilant and prepare for
strong united direct action in case the government of India fails to retrace
from their policy of privatization of the power sector.
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