The Kerala Electricity Workers' Federation (KEWF) has urged the State government to rescind the move to corporatise the Kerala State Electricity Board by accepting the Central government’s financial restructuring package.
A.N. Rajan, president of the KEWF, affiliated to the All India Trade Union Congress, said that acceptance of the restructuring package for getting the Central assistance of Rs. 162.5 crore would be harmful. As per the conditions in the restructuring package, if the State government takes over the 50 per cent of the liability of the power distribution companies, the Central government would give one-fourth of that amount as financial assistance.
The KSEB's total liabilities as on March 31, 2012 stood at Rs. 1,300 crore and 50 per cent of which should be shouldered by the State government, he said adding that the Central subsidy of Rs. 162.5 crore is one-fourth of the 50 per cent of the liability. The remaining portion of the liability would be offset through electricity tariff hike after the conversion of the KSEB into a company.
The main condition of this package is private participation in the electricity distribution that required the bifurcation of the KSEB into generation, transmission and distribution companies, Mr. Rajan said.
The State government had already informed the Centre that it was ready to accept all the conditions including annual hike in tariff and eliminate revenue deficit.
Observing that the conditions in the Central package would have far-reaching consequences in the power sector, Mr. Rajan said that there would be three-fold increase in the tariff. If the tariff was made proportionate to the expenditure, it would be Rs. 5.60 per unit, he said adding that cross subsidy would be withdrawn once the KSEB was made a company. The restructuring package and corporatisation of the KSEB would encourage purchase of power from the market, he noted. This policy was pushing power distribution companies into crisis, he pointed out.
Mr. Rajan also said that the transfer plan prepared by the State government does not offer any guarantee that the payscale and pension of the employees under the company would be equivalent to that in the board. The employees would go for united struggle if the government went ahead with corporatisation of the KSEB without a trilateral agreement to protect their benefits.
