Dushyant Singh Pundir
Tribune News Service
Chandigarh, January 7
The Union Cabinet has approved the highest bid submitted by Kolkata-based Eminent Electricity Distribution Ltd for the privatization of UT's Electricity Department.
Under the process, the government will now establish a company, which would then transfer its stake to the private company.
2.5 lakh consumers in the city
- Currently, there are 2.50 lakhs of energy consumers in the city. Almost 2.14 lakh are domestic consumers and represent more than 87 percent of total consumers. The remaining 23 percent are commercial, small power, medium supply, heavy supply, bulk supply, street lighting, agricultural 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 Rs 871 million, while Adani Transmission Ltd traded Rs 471 million. Among the seven companies competing for power distribution in the city, Sterlite Power submitted the lowest bid of Rs201 crore, while the second highest bid of Rs 606 crore was made by Torrent Power. The offers were opened on August 4 of last year.
UT advisor Dharam Pal said that the technical and legal formalities had not yet been completed and would take almost a month. He indicated that Deloitte, the consulting firm hired to formulate the privatization process of the Electricity Department, had been asked to complete the process as soon as possible.
On November 9, 2020, UT's Engineering Department had called for bids for the privatization 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.
In a petition filed by UT Powermen Union, the Punjab and Haryana High Court, on December 1, 2020, suspended the bidding process regarding the privatization of the department.
The petitioner had claimed that they felt harmed by the government's decision to privatize the Electricity Department by selling 100 percent of the government's shares in the absence of any provision under Section 131 of the Electricity Act of 2003.
The High Court was also told that the department's privatization process could not be started at all, especially when it was running at a profit. The sale of 100 percent of the shares was unfair and illegal as the department had a surplus of income for the last three years. It was economically efficient, with transmission and distribution losses below the 15 percent target set by the Ministry of Energy.
However, on January 12 of last year, the Supreme Court of Justice suspended the order of the High Court and on January 14, the UT Administration resumed the sale of tenders for the privatization process.
After the UT administration restarted the process, the union again filed a petition in the Superior Court that again suspended the process on May 28, but the order was suspended by the Supreme Court on June 28, clearing the covers once again for the privatization of the department. .
