Former MP urges Centre to stop move to privatise Electricity Department

M. Ramadass said there was no “logic in privatising a profit making and robust enterprise without examining the facts and figures.”

Former Member of Parliament M. Ramadass has urged the Centre to stop the move to privatise profit making Puducherry Electricity Department.

In a letter to Union Minister for Power and Renewable Energy, the economist turned politician said there was no “logic in privatising a profit making and robust enterprise without examining the facts and figures."

"A private player is not even an imperfect substitute to a strong department. He may not improve the existing supply of distribution in any better way. Perhaps, he may resort to two-way exploitation – consumers by hiking existing tariff under some pretext and employees by wage cutting and retrenchment policies. By maximising his profits and filling his coffer, he may proclaim to be more efficient but at a heavy loss of public welfare,” Mr. Ramadass said.

The Electricity Department (ED) has made great strides in terms of financial efficiency and asset creation. The aggregate profit for three years of the department worked out to be around ₹49.18 crore which goes to the exchequer as non-tax revenue. Perhaps, if the subsidies and supply of free electricity to agriculture are dispensed with, the profit of ED may be substantially higher and the eventuality of losses may disappear.

Over the years, the government has made huge investments to improve power distribution in UT. The outlay on power increased from ₹ 0.22 crore in 1970-71 to ₹ 11. 58 crore in 1990-91. It increased substantially to ₹1736.61 crore in 2020 for 14 major schemes. Besides, the department attracted an additional investment of ₹746 crore from Japan International Cooperation Agency.

"This sumptuous investment has facilitated the creation of more than required infrastructure for the distribution of electricity. For instance, the length of transmission and distribution lines have grown from 1966 Km in 1970-71 to 6228 Km in 2020 registering 3.2 fold increase," he noted.

"As a corollary to privatisation, the assets of the public utility will be transferred to the private company at net asset value and that land shall be provided at nominal charges. This means that the assets will not be valued at the current market price but at the original price at which the asset was acquired by ED 50 years ago. Similar is the case with the land belonging to the electricity department,” he said.

People of UT are entitled to an explanation on the virtues of privatisation of their department. People are even consulted on revision of power tariff but not on denationalisation of their property, he charged.

“Electricity is a concurrent subject and hence the views of the State should also be heard before taking a decision. Puducherry is a Union Territory with an elected Assembly and for various purpose it is treated as a State. Should not your Ministry consult the Government of Puducherry before making such a vital pronouncement? A decision applicable to Andaman and Nicobar Islands need not be germane to Puducherry,” Mr Ramadass said in the letter.

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