This is in reference to your recent statement in press regarding handing over of power supply to franchisee or to multiple supply licensee otherwise funds of the states will not be given from Center mainly by PFC and REC. As per press statement Discoms would have to hand over electricity supply business to multiple-supply licensees or franchisees in order to get central government assistance or loans from Power Finance Corporation (PFC) & REC.

 In this respect All India Power Engineers Federation (AIPEF) wants to submit it's view point before you as under.

2. AIPEF wants to bring to your kind notice that   since electricity is a concurrent subject, the Center could not dictate terms to state Governments. Further almost every franchisee, which had undertaken ‘creamy city areas’ has failed in different states, to deliver power to consumers and ultimately the state power Discoms had to take their systems back. Odisha was the first State where all four Discoms were privatized in 1999 but the experiment has miserably failed. AES Company fled away after one year only and licences of all three Reliance owned  Discoms were cancelled by OERC in 2015 due to non performance. 

3. Recently SNLD franchisee in Nagpur has expressed it's inability to run the system and has asked Maharashtra Discom to take over Nagpur distribution. The franchisees in  Aurangabad, Jalgaon,Gaya , Muzaffarpur,Bhagalpur, Gwalior,Sagar,Ujjain, Nagpur  have miserably failed. In other places franchisees regularly defaults in making payments to the power corporations.  With such a poor history of privatisation / franchisee, from where the new franchisees shall emerge is also a vital question.

4. Looking after total failure of Privatization / Franchisee , AIPEF further demands an independent evaluation of the performance of the privatized utilities across the country, their impact on the consumers in terms of the cost burden and customer service and the financial burden caused by them to the banks is the dire need of hour. Further by segregating wire system and supply Discoms will own all the wires Network including risk. If the network damaged during cyclone or any calamity, the Discoms will take all the risk in bringing back the system in original. Odisha is a burning example where AES Company declined to re erect power network after 1999 super cyclone and fled away.The private supply licensee will be free from all these risks. Will it be the fair trading practice by any standard?

 5. Sir, You would kindly agree that no system is full proof and every system has loopholes. The smart way is to plug the loop holes. In fact the public owned Discoms are more robust, responsible and service oriented. This was amply displayed when calamities strike.  There are many failures in the private system. Govt should first fix up responsibility for the failures of franchise already introduced in some cities.  On the other had state Discoms have improved their collection efficiency and have delivered better utility services in Gujarat, AP, Telangana State, Karnataka,Maharashtra,Punjab,WB and in many other states, compared to private entities.

6. Therefore It is requested that MoP, GOI should shelve any such proposal of segregating Distribution and Supply and to hand over  electricity supply business to private licensee or franchisee otherwise power engineers across the country will have no other option except to strongly oppose this anti people move in the larger interest of Country and Power Sector.

Thanking You.

Sincerely Yours

Shailendra Dubey

Chairman