No.04 - 2019 / Against privatisation process 27 - 01 - 2019
Sri Naveen Pattnaik
Chief Minister
Govt Of Odisha
Bhubneshwar
Sub : Against privatisation process of power distribution in Odisha
Respected Sir,
All India Power Engineers Federation (AIPEF) Federal Executive meeting was held at Bhubaneswar on 23rd January 2019. Representatives from states all across India participated in the meeting. AIPEF FE mainly expressed it's concern on re privatisation attempt of Odisha Distribution sector.
2. It was noted that, two private companies namely Tata Power and India Power Joint Venture with Fedco have submitted their bids for CESU ( Central Electricity Utility ) and evaluation by CRISIL is going on for reprivatisation of three other Distribution Utilities namely Nesco, Southco and Wesco. It was noted that while there is large scale controversy surrounding Tata Power in Delhi, the India Power Company has also miserably failed at Gaya in Bihar as a franchisee and had been driven out. Similarly even though Fedco as a franchisee in CESU Odisha had also been way behind the target in terms of performance for reducing AT&C losses ( currently 41% against target of 15%) , in terms of revenue collection , in terms of metering , in terms of investment in infrastructure and violation of contract but now it is learnt that the joint consortium of both the companies are being considered for evaluation . Not only Fedco in Odisha has miserably failed as a franchisee, none of the other urban distribution franchisees has succeeded in any other Indian state. As a matter of fact, franchisee in all the states have failed and driven out. To name a few Urban Distribution Franchisee of Gaya, Samastipur and Bhagalpur in Bihar, Kanpur in UP, Gwalior, Sagar and Ujjain in MP, Aurangabad and Jalgaon In Maharastra, Ranchi and Jamsedpur in Jharkahnd etc have been cancelled.
3. AIPEF FE noted with concern Odisha’s experience with Privatisation which has been nothing short of disaster. The Private Companies in Odisha achieved none of the following objectives,
1. They did not invest a single rupee in the sector
2. They failed to reduce AT&C Losses which still remains at around 40%
3. They owe huge arrear to Power Purchase Company GRIDCO , which roughly stands at around Rs 7000 Crores as against the total accumulated loss of Rs 300 Crores at the time of OSEB.
4. They mismanaged the sector with poor governance and spoiled the organisational climate. The wide spread HR mismanagement has affected the sentiments of employees and engineers.
5. Quality of service deteriorated to the worst as they did not even invested working capital for maintenance of the existing infrastructure. This is the main cause of frequent power failure.
4. Odisha has seen 4 major cyclones during Privatised era causing large scale devastation. The Private Companies did not take quick steps by resources mobilisation, and finally it is Govt. which not only provided fund but resources for revival of electricity. It is Govt. of Odisha as well as Govt. of India ,who have invested crores of rupees in the sector for infrastructure development. After investing thousand crores of rupees in the sector, it is surprising that Govt. of Odisha is giving a free hand to Odisha Regulatory Commission for re-privatisation without any review. During earlier privatisatised era , the private companies had left behind around Rs 7000 crores of rupees of arrear to GRIDCO. If the new private companies also do not perform and leave behind further thousand crores of rupees, the question is what will happen to this financial loss . Will it not be a huge burden on consumers?
5. AIPEF FE demands that ---
Govt. of Odisha must cancel the re privatisation process of the Odisha Distribution sector.
1. Govt. of Odisha must review the reforms and privatisation done so far by an expert committee before taking any further step. As important stake holders, the Govt. must talk to Engineers Associations, Employees’ Unions and Consumers and take their views.
2. Govt. of Odisha must appoint an expert committee to study the miserable performance of India Power Company in other Indian states and Fedco in Odisha as they are one of the bidders for CESU.
3. Govt. of Odisha must consider the KSEB Ltd (Kerala) and HPSEB Ltd (Himachal Pradesh) model of operating Electricity sector as an integrated utility within the frame work of the Electricity Act 2003.
6. AIPEF in it’s Federal Executive meeting has decided to resort to agitational steps and to actively support Power Engineers and Employees of Odisha in their movement against Privatisation of Power Distribution. AIPEF warns that if the privatisation is rushed through,then Odisha Power Engineers in association with Power Employees will jointly oppose any such move and shall be forced to resort to agitation ,responsibility of which will be of the Odisha Government. AIPEF has further resolved that in that event Power Engineers from all other states of the country will extend full active support to Odisha Power Engineers agitation by resorting to state wise relay Dharana /Satyagrah at Bhubaneswar.
7. Therefore AIPEF appeals you to kindly use your good offices and intervene in the matter so that CESU and other power utilities of Odisha are not privatised in the larger interest of the state and Power Sector and unnecessary industrial unrest in Odisha power sector is avoided.
Thanking you with regards.
Yours faithfully
Shailendra Dubey
Chairman
CC.
1. Hon'ble Power Minister, Odisha Govt, Bhubneshwar.
2. Chief Secretary, Govt Of Odisha, Bhubneshwar.
3. Secretary (Energy), Govt Of Odisha, Bhubneshwar.