UP again mulls privatising power distribution, selects consultant for feasibility study in three cities

Written by Deepa Jainani | Lucknow | Updated: Aug 27 2014, 06:51am hrs
More than a year after the Uttar Pradesh government developed cold feet on privatising power discoms, the state is again exploring the idea.

In a renewed bid to usher in privatisation in the sector, the Akhilesh Yadav government has selected a consultant to make a feasibility report for Meerut, Ghaziabad and Varanasi.

For this, the state has signed an agreement with Mecon, which will submit its report in 52 weeks. "We will go forward with a concessionaire agreement only if the consultant's report states that it would be feasible to privatise distribution in these cities," said an official of UP Power Corporation, adding that quite a few other companies had also bid for the consultancy, including PGCIL and Tata.

Last year, the state government had beat a hasty retreat when agitating workers, under the aegis of UP Power Employees Joint Action Committee, had threatened an indefinite work boycott across the state in protest against UPPCL's move to privatise distribution in Meerut, Ghaziabad, Kanpur and Varanasi.

Principal secretary, energy, Sanjay Agarwal, had written to the employees that the government had merely invited bids from technical consultants. "The UP Power Corporation clarifies the state has not taken any decision on privatising distribution in the four cities," he had written, adding that any decision on reforms would be taken "only after taking the power employees and engineers into confidence".

UPPCL managing director AP Mishra had tried to impress upon the employees that privatising power distribution in the four cities was a pre-condition for getting the financial restructuring package (FRP) from the Centre. But when the employees asked why profitmaking cities were being given away for privatisation and pointed to ulterior motives behind the move, the corporation was forced to buckle. The sudden decision to withdraw was, however, seen as a major hurdle in the plan to usher in energy reforms.

UP Power Employees Joint Action Committee convenor Shailendra Dubey said: By giving profitmaking cities into private hands, the government is effectively privatising profits and nationalising losses, which is just not acceptable. We will fight it tooth and nail, he said.