To,
Sh Naveen Patnaik jee
Hon.’ble Chief Minister, Govt. Of Odisha,
Bhubaneswar -
Sub: Privatization of the Power Sector in the State of Odisha.
Esteemed Sir,
Through this letter and in wake of the ongoing move by the Govt of Odisha to Privatize the Power Sector in Odisha, I on behalf of the Himachal Power Engineers wish to draw your kind attention to the ill perceived grandiosity on the “ ‘Privatization’ in the Power Sector” perpetrated by a select few. Of late, Privatization in the Power Sector has become a fancy phrase in the so-called intellectual circles. While in the past the ground realities remained farfetched, limited understanding on Privatization of Power Sector or on Unbundling of Power Utilities was vehemently pursued through unthought-out Policies and without any regard to future consequences perhaps with un-spoken agendas in mind.
During the mid-‘90s, your State of Odisha was the first in the country to have undertaken the road in the direction of Power Sector Regulation and its subsequent Privatization in the years ’99 - 2000 . Despite this having been done on the anvil of well-set out Policies, the experience was non-the-less not without burning fingers. The Unbundling of Power Utilities that followed at the behest of The Electricity Act, 2003 in several States across the Nation, also did not have the intended positive effects. In-fact, the fallouts have been more negative and nowhere has the objective as mandated in The Electricity Act, 2003 been fully achieved. This experiment by the States has taken place at a huge price, primarily that being of completely uprooting the existing systems virtually to the point of no return. The damages done can never be undone. The mounting financial losses of Utilities have not come down but have increased pushing them further into the red. The Tariffs to consumers have not come down but have increased multi-fold having inflationary effects on the Economy. Reduction in T&D and AT&C losses being capital intensive have improved only when the State or Centre Governments have infused exorbitant funds. Despite having entered into the 21st century, un-electrified areas / population sections without electricity still exist in States/country and extending electrification to them is a daunting task which requires huge capital investment. The citations are innumerable which is not a matter of pride for the country and we certainly do need to introspect and retrospect as to where our presumed flawless policies went wrong – where did we fail.
Unlike the Telecom or the banking sector which when subjected to a competitive environment has worked well, the same context certainly does not auger well in the context of the Power Sector. The reason being firstly that the Telecom or Banking sectors do not thrive on the use of Natural resources and secondly that the complexities of the Power Sector being of esoteric nature are understood by a select few and are not comprehensible to many and it is these ‘many’ that perpetrate those ill-conceived Policies which ultimately fail.
Power Sector unlike other sectors is primarily driven by the use of rare National Resources / Public Goods whose use cannot be indiscriminate and therefore the sector cannot be subjected to a competitive environment (ie Privatization). Moreover, in India the conditions are in contrast to that in the Developed world where the use of natural resources/public goods is not constrained by the burden of a booming population which severally needs these for its survival. The use of these Natural Resources / Public Goods has to be regulated and therefore the Power Sector in India will work at its best if it is Regulated.
If the Power sector cannot be a ‘Competitive’ one, it has to be a ‘Regulated’ one, regulated either by the Government or by a Regulator who are mandated to protect the power sector from cherry pickers and from rent seekers thriving to make profits by exhausting the rare natural resources/public goods. The mandate to the Governments and Regulators is also to provide for all-inclusive sustainable development and this is also why the Power Sector cannot be allowed to go into private hands. Presently, the power sector in the country is by and large regulated and any attempt by your Government to again move in the direction of Privatization without carrying out a detailed impact assessment will have the effect of completely collapsing what-so-ever is left of the Power Sector after the failure of the previous experimentation and further in completely decimating it in the State. In-fact, the previous lead taken by your State in the mid-90s, caused a wave to sweep through the country which led other States to fall suit and the so ever prevalent culture of following a ‘Precedent’ without having undertaken comprehensive research and analysis and with the handy-easy approach of one-fit-all, has caused the Power Sector to suffer across the Nation.
Given the socio-economic-cultural and political set up in the country, consolidating the existing Power Sector by re-bundling all power Utilities into one entity under a Regulated environment is likely to have more beneficial and long-term effects in strengthening the existing Power Sector while at the same time protecting the overall interest of the State and the Nation. Providing 24x7 Quality Power Supply to its citizens is an obligation of the State and not of the Private and it is the State alone that can fulfil that obligation. It is the State alone that can infuse huge capital into the power sector. Looking elsewhere will be a waste of time and would once again be a failed experiment. The loss of time when viewed retrospectively in the future would be culpable of the State that had gone head-on to venture on that forbidden turf without any foresight or with only a parochial mindset.
In view of aforesaid, Himachal Power Engineers wishes to solicit that at-the-least, a comprehensive research and analysis on Privatization of the Power sector be undertaken to ascertain its long-term negative effects rather than relying on hearsay please.
Himachal Power Engineers also wishes to solicit your personal intervention in preventing the privatization of the Power Sector across the Nation by opposing the adverse Policies being perpetrated in the Centre by way of The Electricity Amendment Bill, 2014 and the best place to start with is at home ie your very own State of Odisha please.
With Kind Regards
Yours sincerely
---Sd---
Er Tushar Gupta
General Secretary
Himachal Power Engineers’ Association
CC:
(1) The Honourable Minister , Department of Energy , Govt , of Odisha.
(2) The Chairman Odisha Electricity Regulatory Commission.
(3) The Commissioner cum Secretary , Department of Energy , Govt. of Odisha.
(4) Sh Shailendra Dubey, Chairman,-All India Power Engineers Federation, Hydel Field Hostel, 17 Rana Pratap MargLucknow-226001