ALL INDIA POWER ENGINEERS FEDERATION 

No. 40 - 2019 / Against Privatisationof CESU                      27-12-2019

Hon'ble Sri Naveen Pattanaik

Chief Minister

Govt Of Odisha

Bhubneshwar

Sub : Against privatisation of CESU in Odisha

Respected Sir,

 All India Power Engineers Federation (AIPEF) wants to draw your kind attention against issuance of Letter of Intent (LOI) by OERC to M/S Tata Power for sale of Central Electricity Supply Utility (CESU) which is not at all in the interest of common consumers of Odisha. It is despite the fact that the very experiment of privatisation of power sector has already miserably failed in Odisha and OERC had to cancel the distribution licence of all three Reliance owned Discoms in February 2015. It is worth to mention that Odisha was the first state in India to go for privatisation of power distribution in year 1999. Out of four DISCOMS one was handed over to prestigious AES Company of USA while three other DISCOMS were handed over to Reliance Power. After one year AES Company of USA left in year 2001 while electricity supply licences of other three Reliance owned DISCOMS were cancelled by OERC in February 2015 on account of non performance and inefficiency of private companies.

2. The proposed sale of CESU to Tata Power will be through the formation of a special purpose vehicle entity. Tata Power has been informed that Government of Odisha will own 49 per cent equity stake in the proposed SPV and Tata Power will hold 51 per cent equity with their management. As per LOI Tata Power will own license for distribution and retail supply of electricity in Odisha's five circles together constituting Central Electricity Supply Utility of Odisha (CESU). The license is being offered for 25 years initially a special purpose vehicle will be formed in which the company will own 51 per cent and the balance 49 per cent will be owned by the Odisha Government. The deal values CESU at Rs 350 crore.

3. You are kindly aware about the previous horror experience of privatisation. Instead of taking any lesson from miserable failure of privatisation experiment in state it is shocking that OERC has issued LOI for sale of CESU and Odisha Govt is sitting silent. You would kindly agree that it is a matter of serious concern for all stake holders particularly engineers, employees and electricity consumers.  

4. It has come to our knowledge that evaluation of CESU is more than Rs 3000 Crore which is being handed over to Tata Power at one tenth of it's cost that is at Rs 300 Cr only. Since Tata Power will have 51 % share they will get it by paying only about Rs 150 Crore which itself is a big scam and needs to be thoroughly probed before handing over. AIPEF wants to draw your kind attention towards the fact that   there is large scale controversy surrounding Tata Power in Delhi & Rajasthan also. As a matter of fact privatisation experiment in all the states have failed and driven out. To name a few Gaya ,Samastipur  and Bhagalpur in Bihar, Kanpur in Uttar Pradesh,Gwalior , Sagar and Ujjain in Madhya Pradesh , Aurangabad , Jalgaon & Nagpur In Maharastra, Ranchi and Jamsedpur in Jharkahnd etc. have been cancelled.

5. AIPEF is of firm opinion that Odisha’s experience with Privatisation had been nothing short of disaster. The Private Companies in Odisha achieved none of the objectives then why again same failed experiment is going to be repeated in Odisha.  Recently during a major Super Cyclone in Odisha Power Engineers performed their duties in all odd circumstances to restore power supply in coastal areas in record time. It may be mentioned that  Odisha had seen 4 major cyclones before it during Privatised era  causing large scale devastation .The Private Companies did not take required steps by resources mobilisation , and it is Govt. who not only provided  fund but resources for revival of electricity. AES Company had refused to re - erect the power lines and sub stations devastated in cyclone.

6. Moreover 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 allowing to Odisha Regulatory Commission for sale of CESU at throwaway price. During earlier privatisatised era , the private companies had left behind around Rs 7000 crores of rupees of arrear to GRIDCO. If the new private company also do not perform and leave behind further thousand crores , the question is what will happen to this financial loss . Will it not be a huge burden on consumers.

7. AIPEF requests you to kindly use your good offices and intervene firmly to cancel the LOI issued by OERC in favour of Tata Power. AIPEF also wants to intimate you that, if the handing over of CESU to Tata Power is not stopped then Odisha Power Engineers in association with Electricty Employees will jointly oppose such move and resort to agitation. In that event power engineers and employees of all States will actively support Odisha power engineers struggle. If their genuine demands are not addressed and privatisation is not withdrawn then power engineers and employees in all other states of country shall not remain silent spectators and shall be forced to resort to agitational steps in their support. 

Hope for an early action to stop detrimental privatization process of power sector in Odisha in the larger interest of the state and power sector.

Thanking you with regards.

Yours

Shailendra Dubey

Chairman

CC.

    1. Power Minister, Govt of India, New Delhi.

2. Energy Minister, Odisha Govt. Bhubneshwar.

3. Chairman OERC, Bhubneshwar, Odisha.

4. Chief Secretary, Odisha Govt, Bhubneshwar.

5. Energy Secretary, Odisha Govt, Bhubneshwar.