Big Victory for Electricity Workers & Engineers in UP; A Blow to Privatisation

J S Majumdar

THE BJP government in Uttar Pradesh led by Yogi Adityanath issued a notification for privatisation of electricity supply in seven districts -- Etawah, Kannauj, Orai, Raebareli, Saharanpur, Mau and Ballia, and called tenders. It issued another notification for privatisation through franchisees of public sector electricity distribution companies (discoms) in the five cities of Lucknow, Gorakhpur, Varanasi, Meerut and Moradabad.

Protesting against these privatisation moves of the Yogi government, under the banner of the Electricity Employees Joint Struggle Committee -- the joint platform of all electricity unions and associations -- electricity workers and engineers unitedly launched statewide successful agitation including demonstration, dharna, state-level protest rally on March 14, ‘work boycott’ on March 27, work-to-rule since March 28. They had also given a notice for a three-day strike from April 9.

By April5, the Yogi government backed down and state power minister Shrikant Sharma invited the struggle committee for discussion. After prolong discussion in his presence on April 5, a written agreement was signed between Electricity Employees Joint Struggle Committee and the Principal Secretary (Energy)-cum-Chairman of UP Power Corporation Limited (UPPCL). They agreed that (i) tenders of privation in seven districts were withdrawn; (ii) “any reforms in power distribution will be done within the existing system of power distribution corporations in Uttar Pradesh and after taking the employees and engineers into confidence”; (iii) “there shall be no privatisation at any place without taking employees and engineers into confidence”; (iv) other demands would be discussed and settled bilaterally; and that (v) there shall be no disciplinary action against any employee/engineer for participation in the present movement.

The CITU, in a statement, congratulated the UP electricity workers and engineers for their successful united agitation and victory by forcing the Yogi government to withdraw the tenders floated for privation of electricity supply in seven districts; rolling back the proposal of handing over  entire electricity distribution to private franchisees in five cities; to continue the distribution and supply of electricity within the ‘existing system’ of state public sector discoms; and extracting a ‘no privatisation of electricity at any place’ undertaking from the government.

This victory of electricity employees in Uttar Pradesh against privatisation is significant in the background of ongoing countrywide struggle of electricity employees and engineers under the banner of National Coordination Committee of Electricity Employees and Engineers (NCCOEEE) who held a massive rally in front of Parliament on April 3 and issued notice for a one-day countrywide strike on the day the Modi government introduces the Electricity (Amendment) Bill 2014 in Parliament.  

The Electricity (Amendment) Bill, 2014 has proposed segregation of electricity distribution into two parts – (i) the ‘carriage’ or infrastructure of electricity distribution, which shall remain mainly with discoms or their franchisees; and (ii) the ‘content’ which will be open to multiple private suppliers through single distribution network in a particular area under ‘open access’ system.

Even before the Bill is introduced in Parliament, the Yogi government tried to operationalise it in Uttar Pradesh when UPPCL issued tenders inviting private parties for ‘content’ part of electricity distribution (as proposed in the Electricity Amendment Bill), who were to be called as ‘Integrated Service Providers’ (ISPs) for consumer-related activities such as new electricity connection, installing metres, metre reading, changing metres, issuing bills, collection of revenues, etc.

Privatisation of Electricity and Increasing Burden on People

The Electricity (Supply) Act, 1948 was for ‘generation, transmission and distribution of electricity’ by both the central and state governments as the electricity was conceived as an essential service for development. Central Electricity Authority (CEA) and State Electricity Boards (SEBs) were constituted for electrification in the entire country. Cost of supply was realised through cross subsidy – the people having limited financial capacity were subsidised by higher income groups of consumers.

During the NDA regime, though the Electricity Act 2003 there was trifurcation and corporatisation of generation, transmission and distribution and also allowing private companies to operate in all three areas. However, increased privatisation through franchises, contractorisation and outsourcing failed to achieve the declared goal of the 2003 Act of making electricity cheap. Odisha was one of the first state in privatisation drive inviting US company AES and subsequently Reliance. But, both failed. Now, all activities related to electricity in the state have fallen back on the state.   

Ultra Mega Power Projects (UMPPs) were developed through tariff- based international competitive bidding for power generation. But this also proved to be a failure. Only three out 16 projects were operationalised. These are attempting tariff hikes through backdoor. Ambanis in Sasan and Adani in Mundra lost their legal battle in the Supreme Court in their attempt to legitimise unlawful business. Ten discoms, which signed PPAs with these projects, over charged consumers of thousands of crores of rupees.

Earlier, accumulated loss of all SEBs together stood to Rs 30,000 crore in five decades. But, within 14 years of corporatisation of SEBs, accumulated loss of all discoms stood at Rs 4.3 lakh crore, besides debt burden of over Rs 5 lakh crore to financial institutions while imposing six to eight times tariff hikes burden on the people.

New Attack  

The Modi government has now widened the scope of privatisation through the proposed Electricity (Amendment) Bill, 2014 proposing segregation of electricity distribution which is first attempted in Uttar Pradesh. Driven by only profit motive the private suppliers will be interested in revenue potential cities and industrial hubs. Government-owned distribution companies will have to bear the loss with poor consumers without any scope for cross subsidy.


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