Privatisation of Electricity Department: Chandigarh gives nod, ball in Centre’s court now

Dushyant Singh Pundir

Tribune News Service

Chandigarh, August 24

After getting approval of UT Administrator VP Singh Badnore, the UT Administration today sent the final bid report on privatisation of the Electricity Department to the Ministry of Power.

The ministry will now take up the bid report with the Union Cabinet for final approval and after that the department will be handed over to the highest bidder.

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

On August 3, the technical bids of the seven companies were approved, and the go-ahead was given to open the financial bids.

When financial bids were opened the next day, Eminent Electricity Distribution Limited – a subsidiary of CESC Limited, which is a flagship company of RP-Sanjiv Goenka Group – had submitted the highest bid of Rs871 crore. The amount was five times the reserve price of nearly Rs174 crore.

On August 9, the Empowered Committee on privatisation of the UT Electricity Department gave its approval to the highest bid quoted by Eminent Electricity Distribution Limited. Later, the report of the committee was submitted to UT Administrator VP Singh Badnore for approval.

After getting an approval from the Administrator, the report was today sent to the Ministry of Power for further action, said UT Adviser Dharam Pal. He, however, said the final call on the issue would be taken by the Union Cabinet.

On a petition filed by the UT Powermen Union, the Punjab and Haryana High Court had on December 1 last year stayed the tendering process regarding privatisation of the Electricity 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 profits. 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, the Supreme Court had stayed the High Court order and on January 14, the UT Administration resumed the sale of tender for the privatisation process.

After the 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 the privatisation of the department.

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