FIGHT AGAINST PRIVATISATION OF POWER SECTOR

BY CITU, MAHARASHTRA COMMITTEE

1. It is a welcome step that trade unions and public sector officers associations are coming together to have a serious discussion on the fight against privatisation. Privatisation is creating a big mess in our country. It is ruining our infrastructure, and allowing the loot of our most important resources by the monopoly capitalists and multinationals. A better term to describe what is happening is PRIVATISATION OF THE INDIAN ECONOMY. In December 1999, an airplane was hijacked by the terrorists causing great damage to our country’s interests. In the name of privatisation, the entire airlines, along with the airports are being hijacked. In fact our shole economy is being hijacked by modern economic pirates of which Enron is a prime example. Many desi Enrons are waiting in the wings to takeover our national economy.

2. The power sector is a good example. In 1991 the New Power policy was announced, with its emphasis on privatisation. After Independence, a strong power sector had been built up mostly in the public sector, with installed capacity of more than 75,000 MW. Power infrastructure was built up in all the states. Many rural areas were electrified. This development could never have taken place if [power was left to the private sector.

3. There were no doubt some serious problems. T & D losses were unacceptably high. There was, and is, much corruption in the electricity sector at all levels depriving the SEBs of thousands of crores of revenue, and threatening the financial viability of the State Electricity Boards. These problems are not impossible to tackle. But instead of tackling thje problems, the problems were taken as an opportunity to push for privatisation.

4. The push for privatisation came in 1991, with the New Power Policy. This was supported by most major political parties except those of the left. The World Bank and IMF also have been exerting heavy pressure to privatize through the loan conditionalities. The main arguments of the proponents of privatisationa re:

a. There is a resource crunch. There is no money for further development. This can only come from the private sector, in particular, foreign investors.
b. Only privatisation can introduce the financial discipline needed. The SEBs are bankrupt.
c. Public Sector is inefficient. Private Sector power will mean more efficiency and better services.

5. The complete failure of the privatisation policy in power sector is clar from the experience of all states – Orissa, Andhra, Karnataka, Haryana, Maharashtra etc. Enron has played an important educational role in this respect. (Uinfortunately the educational expenses, originally estimated at 20 million dollars, have turned out to be much higher.) It is useful to compare the reality of Enron with the arguments of the privatisers:

a. About Rs 6000 crores has been lent to DPC by Indian lenders. This money by itself is sufficient to put up the project. So what was the need for a foreign investor.
b. Within one year, DPC almost bankrupted not only MSEB, but also the Govt. of Maharashtra.
c. Whereas elsewhere, increased efficiency leads to lower costs, the increased American efficiency of DPC and Enron would mean tariff higher by 300% to 500 % as compared to inefficient MSEB.

6. It is not only Enron. The complete failure of the privatisation policy is seen in all states. The State of Orissa was supposed to the frontline state of the World Bank reforms in the power sector. Today the electricity sector in Orissa is ina a total mess. In Orissa, there was unbundling of OSEB into three separate entities and privatisation of distribution and generation, with transmission in the state sector. After five years there is total chaos in Orissa electricity sector.

a. T & D have not decreased but increased after privatisation.
b. The private DISTCOs (for distribution) have huge unpaid bills to the state sector TRANSCO amounting to more than Rs 1200 crores. These unpaid debts have been converted to loans by the WB and state and central governments in order to cover up the fiasco, so as not to “put the whole reform process in peril”. These subsidies to the private sector are even higher than the earlier subsidies.
c. After the Orissa cyclone, the private DISTCOs refused to make repairs to the destroyed rural distribution lines, on the grounds that this was not economically viable.any villages have not had their electricity restored.
d. Load shedding is rampant all over the state.
e. The electricity tariff for all categories has been increased by 250% in five years, i.e., by around 20% each year regularly. Electricity has become unaffordable for many sections of consumers.
f. The private electricity companies have not paid the employees their wages leading to gheraos and riots.

7. These are only some of the ‘benefits’ of privatisation that the people of Orissa are experiencing under the World Bank model of development. Our privatized mass media are imposing a strict ban on all true reports about what is happening in Orissa. This failure of electricity reforms is also seen in Andhra Pradesh where last year there were widespread protests against tariff hike, leading to police firing in which many were killed and injured.

8. It is the responsibility of the Trade Unions and associations gathered here to bring these facts to the attention of the public at large. The Electricity sector is too important a sector to be thrown to the wolves of the pirate sector. We will be failing in our national duty if we do not come forward to rescue the electricity sector, in fact the energy sector as a whole from the privatisation offensive. The consequences of a failure of the electricity sector are already being seen in our economy.

9. Price of electricity for industry in Maharashtra and other states is already among the highest in the world. Indian industry will be unable to compete internationally if the price increases. Industrial consumption from the SEBs is decreasing. Cost of water for agriculture is also dependent on electricity price. Faced with competition from agro-imports on the one hand and higher water costs on the other, Indian farmer is facing a grim future. Light industry like power loom which provides jobs to lakhs of workers is also threatened by high cost of power.

10. Godbole committee in its Part II report has recommended a “Maharashtra model” which is nothing else than the discredited WB model of reforms. A separate note has been prepared on this by CITU Maharashtra Committee and submitted to the government. It is really remarkable how so called experts like Shri Madhav Godbole have become blinded by the privatisation bubble and are failing to see that WB model is unviable and unsustainable in India.

11. The task falls upon the trade unions and organisations of workers and officers and left and democratic forces to rescue the electricity sector. Electricity can be affordable to the common people only if it remains in the public sector. Can we rise to the occasion? This is the question before us today. Nobody else is interested in demanding the public power sector. But we will have to tackle the problems frontally. There is not much time left.

12. The first problem is that of keeping the SEBs financially viable. Tariff increase has reached a saturation point. The only way out is reducing T & D losses which are around 40%. This is unacceptably high. This can be reduced to half by a campaign against malpractices. Can Trade Unions take up this challenge seriously. This will require us to take a position against opportunism in the TU movement which defends malpractices. Can we take this issue to our rank and file?

13. Electricity is an issue which affects every household. There is an urgent need to build an alliance between the consumers and the electricity sector workers. This will require a radical change in existing attitudes. Trade Unions must take the initiative.

14. This issue must be recognized as a political issue. Trade Unions cannot shy away from political questions and must take them up on their agenda. Immediately the Electricity Bill 2001 is on the agenda of the Central Government. This Bill will bring about the framework for accelerating privatisation. Just as unions are unitedly opposing the changes in labour laws, we must also come together to oppose the Electricity Bill 2001.

15. The fight against privatisation of infrastructure requires the necessary tools and weapons. There are powerful intellectual and ideological forces in favour of privatisation. They have the money and media at their disposal. We have our organised strength. But we must also win the intellectual and ideological battles ahead. For this a lot of homework is necessary. We must together create the necessary resources for doing this homework, so that we can intervene effectively with viable alternatives.

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