Power privatisation in Chandigarh: Centre approves highest bid

Dushyant Singh Pundir

Tribune News Service

Chandigarh, January 7

The Union Cabinet has given its approval to the highest bid submitted by Kolkata-based Eminent Electricity Distribution Ltd for privatisation of the UT Electricity Department.

Under the process, the government will now set up a company, which would later transfer its share to the private firm.

2.5 lakh consumers in city

• At present, there are 2.50 lakh power consumers in the city. Nearly 2.14 lakh are domestic consumers and account for more than 87 per cent of the total consumers. The remaining 23 per cent are commercial, small power, medium supply, large supply, bulk supply, public lighting, agriculture power and temporary supply consumers.

A subsidiary of CESC Limited, a flagship company of RP-Sanjiv Goenka Group, Eminent Electricity Distribution Ltd made the highest bid of Rs871 crore, whereas Adani Transmission Ltd quoted Rs471 crore. Among the seven firms in the fray for power distribution in the city, Sterlite Power submitted the lowest bid of Rs201 crore whereas the second-highest bid of Rs606 crore was made by Torrent Power. The bids were opened on August 4 last year.

UT Adviser Dharam Pal said technical and legal formalities were yet to be completed and these would take nearly a month’s time. He stated that Deloitte, the consultant hired to formulate the process for privatisation of the Electricity Department, had been asked to complete the process at the earliest.

On November 9, 2020, the UT Engineering Department had invited bids for privatisation of the Electricity Department. Seven companies — Sterlite Power, ReNew Wing Energy, NESCL (NTPC), Adani Transmission Ltd, Tata Power, Torrent Power and Eminent Electricity Power Ltd — had submitted their bids.

On a petition filed by the UT Powermen Union, the Punjab and Haryana High Court had, on December 1, 2020, stayed the tendering process regarding privatisation of the department.

The petitioner had contended that they were aggrieved by the decision of the government to privatise the Electricity Department by selling 100 per cent stake of the government in the absence of any provision under Section 131 of the Electricity Act, 2003.

The High Court was also told that the process of privatisation of the department could not be initiated at all, especially when it was running in profit. The sale of 100 per cent stake was unjust and illegal as the department was revenue surplus for the past three years. It was economically efficient, having transmission and distribution losses less than the target of 15 per cent fixed by the Ministry of Power.

However, on January 12 last year, the Supreme Court stayed the High Court order and on January 14, the UT Administration resumed the sale of tender for the privatisation process.

After the UT Administration restarted the process, the union again filed a petition in the High Court which again stayed the process on May 28, but the order was stayed by the Supreme Court on June 28, clearing the decks once again for privatisation of the department.