Centre approves ?871 crore bid by Kolkata-based RP-Sanjiv Goenka Group, which is set to take over the Chandigarh electricity department in a month
In a month’s time, the city’s electricity management will be in a private company’s hand with the Union cabinet giving its nod to the ?871-crore bid made by a private company in August last year.
The electricity department will now be bundled into a company and its shares transferred to the private company.
Stating that the legal and technical formalities are left to complete the process of power privatisation, UT adviser Dharam Pal said, “The consultant (Deloitte) for the entire process is chalking out the plan for conversion of the department into a company. Thereafter, agreements, including share agreement, will be signed and shares of the newly created company will be transferred to the private company. The entire process is likely to take another month.”
The consultant will also formulate the final plan for the employees within the new dispensation. Administration has assured that their interests will be protected.
Kolkata-based industrial and services conglomerate RP-Sanjiv Goenka (RPSG) Group had quoted the highest bid for the department.
The group’s flagship Calcutta Electric Supply Corporation (CESC)’s wholly-owned subsidiary Eminent Electricity Distribution (EED) quoted a bid of around ?871 crore against the reserve price of ?175 crore. The next highest bid of ?606 crore was made by Torrent Power.
Others among the seven companies in the race were Sterlite Power, ReNew Wing Energy, NTPC Electric Supply Company Limited, Adani Transmission Limited and Tata Power.
Originally, 21 companies had bought the request for proposal, but only these seven entered the bidding stage.
The decision to privatise the UT electricity department was taken on May 12, 2020, after directions from the Centre. The UT had committed to finish the process by year-end, but it got entangled in legal battles after the UT Powermen Union approached the Punjab and Haryana high court against privatisation. The move also elicited criticism from resident welfare associations and opposition parties.
The process was stayed by the high court twice. Most recently, on May 28, HC had applied brakes on privatisation and even pulled up the administration for its “undue hurry” during a raging pandemic.
On both occasions, the administration had approached the Supreme Court, which allowed the process to continue. HC will be taking up the case again on Thursday.
Tariff still within JERC’s ambit
The UT electricity department caters to a city with a relatively low demand of around 400MW. As there are only 2.3 lakh consumers, if privatised, the department’s efficiency is expected to improve, specifically in terms of distribution of power. “The Joint Electricity Regulatory Commission will continue to oversee and fix the tariff for the private sector operator, as being done for the government department,” said UT adviser Dharam Pal.
Employees to go on strike
Meanwhile, the UT Powermen Union has called a protest rally in Sector 17 on January 11. Gopal Dutt Joshi, general secretary of the body, said, “We are still awaiting HC’s decision on the petition filed on the issue, but the administration has finalised the privatisation. We will announce a strike call against UT’s decision.”
The process so far
May 12, 2020: UT decides to privatise the power dept
November 9: Bids invited
December 1: HC orders stay on process
January 12, 2021: SC stays HC order
February 9: SC remands back matter to HC
April 19: UT announces it will fast-track the process
May 28: HC stays the process again
June 28: SC once again stays HC order
August 4: Bids opened, EED quotes ?871 crore
January 6, 2022: Union Cabinet approves the bid