N0. 69 - 2020 / Privatisation of Power Sector                             03 - 09 - 2020

Shri Naveen Patnaik JI

Chief Minister

Government of Odisha 

Bhubaneshwar

Sub: Stop sale of Electricity Distribution sector to Private parties in the interest of Consumers, employees and  the state of Odisha.

Respected Sir,

All India Power Engineers Federation (AIPEF) is a federation of all Power Engineers working in States in distribution, transmission & generation of electricity. AIPEF feels highly concerned about privatisation experiments going on in Odisha. AIPEF wants to draw your kind attention towards the fact that Power sector of Odisha is being treated as a guinea pig and subjected to experiment after experiment. Each time the experiment fails a new experiment begins and a new dream is being sold. Ultimately the consumers and the employees are being taken for a ride. Even if they are the two most important stakeholders neither the state administration nor the regulator has shown any concern for them. They are not being taken into confidence.

2. Recent developments arising out of sale of  51% share of CESU to Tata Power Company limited (TPCL) and giving them management right in the new company named  Tata Power Central Distribution Company Limited  (TPCDCL), is not only of great concern to employees, engineers and consumers but to the state as a whole. But the State Govt. which owns 49% of the share in the new company TPCDCL appears to maintain silence amidst this turmoil. Even though the monopolistic behaviour of TPCDCL knows no bounds, OERC is going ahead with the sale of WESCO , NESCO and SOUTHCO under the same principle as done while selling CESU.

3. Hence AIPEF wants to bring to your kind notice the damage already done by this whimsical sale process of CESU  and the irreparable loss that may further occur if the sale of Wesco, Nesco and Southco is not stopped.

1.      Since Odisha started reforms in the Electricity sector 25 years back and privatised the distribution sector, but no other state has followed what Odisha did.  As on date no other state of India ( Delhi is not a full fledged state ) has privatised their electricity distribution. So Odisha should analyse where the state stands in the REFORMS and privatisation process.

2.   Experiment of privatisation and franchisee in Odisha has failed miserably, yet Govt did not analyse the reasons of failure and learn from it. Rather in privatisation of CESU almost repeating the same failed experiment in a different name and form. AIPEF is of the view that the Govt. should appoint an expert committee to study the policies and actions of the last two decades and come out with an action plan. The Govt. should introspect it’s own action.

3.      The analysis should be in two parts (a)Privatisation era (b) Post privatisation era ,” Inputs and takeaways”i.e. What we did and what we got. Is it a win -  win or loose - lose situation. 

4.      Even now when the Govt. of India is trying to pass the Electricity (Amendment) Bill 2020, 11 states and two Union Territories have out rightly rejected the proposed privatisation of Electricity Distribution system.Odisha ,which has a rich and long experience of Electricity Privatisation and in fact a victim of the privatisation experiment  should have opposed the outright privatisation by developing a consensus with the involvement of all stakeholders including employees & engineers which did not happen.

5.      After voluntarily exit of AES in the year 2001 and cancellation of licences of Reliance in the year 2015 , the distribution system was under the control of OERC and this is the era when maximum Govt. investment took place for infrastructure development both for new creation, renovation of old and metering. In CESU alone around Rs 5500 crores of  investment has taken place as per Govt. record and if we take other three discoms another Rs 10000 crores of investment might have taken place. If this huge investment could not change the fate of the distribution system and improve the quality of power supply , how can only 1500 crores of  further investment in CESU by TPCDCL (as promised) change it? This continues to haunt everybody's mind that investment is the issue.

6.      It is learnt that there is a huge change in approach by the TPCDCL before the order of vesting and after it. Even the Commission has sold the 51% of the huge asset of CESU  by a meagre 178 crores of rupees without making any provision for recovery of past dues of GRIDCO and OPTCL running to more than around 2200 crores which remained unpaid by CESU. This is public money which is lost by the stroke of a pen.

7.      The Commission’s vesting order is also going to rub the employees their right to pension , gratuity and leave salary as it did not make any provision for around Rs 1500 crores shortfall in the pension, Gratuity and Leave salary Trusts and no body other than employees are shedding any tear.

8.      It is not only employees and the state PSUs ( GRIDCO and OPTCL) who have been made victim in the sale process , a deeper insight to the review petition filed by M/s TPCL in OERC for review of the vesting order of OERC and seeking almost a wholesome amendment to it speaks volumes about their real intention. The company which silently accepted the vesting order and took over control of CESU w.e.f. 1.6.2020 has filed this review petition ( case no. 27/2020) seeking amendment of every major provision.

9.      TPCDCL wants OERC to do away with the protection granted to the employees as per the electricity  Act that their service conditions will not be any way less favourable to what was existing before such vesting. The company has already started violating the Officers and employees service regulation by appointing around 80 officers from outside without following any prescribed procedure and installed them in all top positions at a salary not known to anybody other than TPCDCL.  Not only this, TPCDCL has even advertised recruitment of more staff and officers of varied experience with an aim of making lateral entry and or creating parallel cadre . It is not known whether OERC has given approval for this sort of recruitment or not? But the silence of OERC in not restraining TPCDCL from going ahead with the recruitment and violating service regulation and in violation to the vesting order  has put everybody in a quandary .

10.  In the review petition ,TPCL wants unbridled powers for mortgaging TPCDCL’s assets and consumer’s security deposits as collateral security to meet it’s fund requirement without spending it from it’s kitty. This dispels all misnomer about the intentions of the private entity and their claim of investment in the sector.

11.  The company is not even willing to take small additional liabilities like funding of employees PF contribution for the month preceding take over, payment of arrear salary and  payment of contractors liabilities of the earlier period  and wants amendment of the relevant portion of the vesting order.

12.  The company also wants to lower it’s performance bar fixed by the commission in the matter of reduction of AT&C loss to evade the fine imposed in the vesting order i.e. Rs 50 crores for every 1% less loss reduction.

13.  The most vital question is why the company wants a review just after 14 days of taking over. Why did they not wait to take over  CESU till their  review petition is disposed off. Matter is very clear , Grab public assets by any means and then play the legal game knowing pretty well the weakness of Govt. and public institutions in this aspect.

Sir, since the sale of CESU has already run to rough weather , employees service condition and terminal liabilities are at huge stake, consumer’s interest is at jeopardy and most importantly the public property is not secure , AIPEF requests you to kindly use your good offices and intervene   immediately to –

A.      Direct or issue advisory as deemed fit to OERC to stop the sale process of WESCO, NESCO and SOUTHCO.

B.      To direct/ advise OERC to share the RFP document with the Employees & Engineers Association and all such information coincidental or incidental to the sale.

C.      To hold talks with the Employees and Engineers Associations and direct / advise OERC to talk to  them as they  are the biggest and most important stakeholders of the sector and hold 10% share in the distribution companies.

D.      Appoint an expert committee to study the whole process of earlier privatisation and recent privatisation of CESU, take away and way forward.

E.      Intervene in the matter of employees grievance and issues raised by the Employees & Engineers Associations  Mancha of erstwhile CESU now in TPCDCL so as to find a solution and advise OERC to cancel the vesting order in public interest. 

Thank you with regards.

Shailendra Dubey

Chairman