State shelves private role in power under union threat

Manveer SainiManveer Saini, TNN | Jul 15, 2012,
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CHANDIGARH/GURGAON: A plan to privatize power distribution, which could have minimized the power pangs of cities like Gurgaon, has been shelved by the Haryana government.

Sources say lack of political will has scuttled what could have changed the face of the power situation in Haryana as the government pandered to the demands of employees of the two discoms - Uttar Haryana Bijli Vitran Nigam (UHBVN) and Dakshin Haryana Bijli Vitran Nigam (DHBVN) - to not privatize distribution of power. Now, sources say, with Haryana elections just two years away, there is little chance of the government implementing the project.

The project was announced with much hype last year and was supposed to be implemented by March 2013. It entailed privatizing power distribution by giving out franchises in two circles - Gurgaon and Panipat - to begin with.

The Union power ministry, in the minutes of meeting held in October last year, had claimed that the participation of the private power sector in the management of distribution of electricity has been encouraging.

Officers in the Haryana power department point out how the model has been successfully implemented by many states.

The input-based franchisee model of Bhiwandi in Maharashtra has been successful. Franchises have been appointed in Kanpur and Agra in Uttar Pradesh, Nagpur and Aurangabad in Maharashtra. The Maharashtra State Electricity Distribution Company Limited (MSEDCL) is also in the process of appointing franchisees in Jalgaon, Shil-Mumbra-Kalwa, Malegaon and Manmad.

"There was strong resentment among the rank and file of the two Haryana power utilities (HPUs) and both the workers' unions were against the system. We even gave the workers' unions an option to take control of the distribution networks. But they did not relent on their stand on stalling privatization even when they could not run the system themselves. Hence, the project had to be postponed," said Haryana power minister Ajay Singh.

Gurgaon contributes monthly revenue of Rs 232 crore against DHBVN's total monthly revenue collection of Rs 500 crore, while Panipat contributes Rs 52 crore a month out of monthly revenue of UHBVN of Rs 350 crore. The two unions have over 20,000 workers on their rolls. The government first shelved the Gurgaon project, followed by the one in Panipat.

"Privatization is inevitable for better management of power distribution system, billing and to cut down technical losses," said Vinayak Chatterjee, chairman of CII's national task force on infrastructure. He also said that state government must consider privatizing power distribution in Gurgaon. "The model has already worked well in cites like Agra, Kanpur and other places. Haryana government must consider it for Gurgaon," said Chatterjee.