Giving in to stiff resistance from power employees, the Uttar Pradesh (UP) government finally scrapped the agreement with Torrent Power for electricity distribution in Kanpur, after being unable to hand over the distribution network to the company for six years.
The decision was taken in a state cabinet meeting, which was presided over by chief minister Akhilesh Yadav in Lucknow on Monday. The agreement was entered into by the Uttar Pradesh Power Corporation Ltd (UPPCL) in May 2009 during the Mayawati government’s tenure.
Under the agreement, Torrent, which had been awarded the franchise in Kanpur and Agra, was to take over distribution system in both the cities by August 15, 2009. While the Agra franchise was handed over to Torrent, the work in Kanpur had to be put on hold due to the stiff resistance of power engineers who had opposed privatisation and had threatened to launch a state-wide agitation.
According to the MoU signed between UPPCL and Torrent Power, the private company was to distribute electricity in Kanpur, and also maintain power lines and realise revenue in the two cities at a fixed rate of R2.17 per unit for 20 years. As against this, Kesco, the power distribution arm for Kanpur city, has been able to realise revenue of R4.71/unit in 2014-15.
Welcoming the step, Shailendra Dubey, convenor of the Power Employees Joint Action Committee, said this clearly shows that Kesco has been able to realize a higher revenue target than that fixed for Torrent. Had this transfer taken place, the UPPCL would have lost approximately R700 crore in revenue every year, he said.