Power privatisation may spell doom for Govt. body

Lucknow Nov. 13. A new policy to be announced later this month to encourage power sector privatisation can spell doom for the four new distribution companies formed in August under the Uttar Pradesh Power Corporation Limited (UPPCL).

With the foray of private sector in power distribution, these new companies, with headquarters at Varanasi, Meerut, Agra and Lucknow, face bankruptcy along with their mother organisation UPPCL.

According to sources, private sector giant Reliance has shown keen interest in taking up electricity distribution of major towns in the State once the new power policy comes into force, leaving the rural areas to the government.

The new State policy slated to be drafted by November 25 would be prepared under the guidelines of the Central Electricity Act 2003 for boosting private participation in power sector.

Sources said when private sector will take to power distribution in major cities, the UPPCL would face a severe revenue crisis as 80 per cent of collection is generated from these cities. Against the total UPPCL revenue of Rs 500 crore per month, the urban areas of Kanpur, Allahabad, Lucknow, Varanasi, Noida, Ghaziabad, Meerut and Agra fetch about Rs. 350 crore.

Meanwhile, All India Power Employees would observe a countrywide `black day' on December 2, the opening day of Parliament Session to protest against the privatisation of the sector.

Secretary general of the All India Power Engineers Federation Shailendra Dubey said here today the new power policy slated to be introduced in the State would result in the UPPCL bankruptcy.

Under the new Electricity Act of the Central Government, any distribution licencee is free to purchase power from any generating unit of the country under the `free access' regime.

"This clause will affect consumers, as the provision is aimed at benefitting the generators who are free to negotiate with the distribution licensees," claimed Mr Dubey.

Under the free access provision, the distribution company has to pay only 2 to 3 per cent surcharge to the state for using their transmission lines to ferry electricity from generating units.

He said with the privatisation of power distribution in eight towns - Agra, Varanasi, Meerut, Lucknow, Kanpur, Ghaziabad, Noida and Allahabad - the UPPCL will be only left with power distribution in small towns, tehsils, blocks and district headquarters. ``The rural areas would be left with the State where power theft is rampant and revenue realisation is negligible."

"We can clearly say that private companies will operate in urban areas while the loss-making region particularly the rural areas would remain with the UPPCL," he claimed.

However, sources said the Reliance Power Company has shown interest in setting up two power generating units in the State. A gas based power unit would be set up at Noida for which several thousand acres of land was being procured by the government to hand over to the company. While a 10,000 megawatt thermal power station would be constructed at Singrauli.

Meanwhile, the U.P. government has sought suggestions from the employees union and other concerned organisations to give their views on the new power policy to the U.P. development council by November 20. -- UNI