Collapse of power reform experiment? Anil Ambani-owned cos' license cancelled in Odisha

Anil Ambani

A major experiment in “power reforms” by handing over the electricity distribution to the private sector has collapsed. In a recent order, the Odisha Electricity Regulatory Commission (OERC) has not only canceled the license to three power distribution companies given in 1999 and owned by Prime Minister Narendra Modi-favourite Anil Ambani's Reliance Infrastructure. It has asked asked the Odisha government to “take over” all three companies.
The OECR canceled the licenses of Southern Electricity Supply Company of Odisha L (Southco), North Eastern Electricity Supply Company of Odisha (Nesco) and Western Electricity Supply Company of Odisha (Wesco) – whose 51 per cent shareholding is with Reliance Infrastructure.. “Unsatisfactory performance by Reliance" was cited as the main reason for canceling the license.
Power experts have called the order “historic” as Reliance was the first private distribution company in the name of reform to take control of power distribution companies in India.
“Over the years Reliance did not get the tariff revisions it asked for from year to year and had to Appeal to Appellate Tribunal for Electricity (ATE) against OERC orders. ATE orders too were ignored by OERC and ATE accused OERC of 'total lack of judicial approach' insubordination, incompetence and impertinence”, a senior power expert said.
The expert has added, “OERC is currently sitting on a tariff revision petition for financial year 2015-16, wherein its choice is either to execute ATE's orders or axe the licensee blaming them on non performance. OERC chose the obvious and revoked Reliance license bringing down the first initiative of power distribution reforms in the country.”
In its order OERC claimed, the distribution loss had become “uncontrollable due to inefficiency of the licensees”, adding, there was no justification for a “financial relief of approximately Rs 4200 crore to pay off cumulative losses and pay off all the liabilities.”
It added, the billing efficiency of Wesco was 41%, of Southco 54%, and of Nesco 49% at the end of 2013-14. The result was, accumulated losses of Wesco were Rs 715.62 crore, of Southco Rs 802.30 crore, and of Nelco Rs 906.31 (2012-13).
OERC said, “One of the major objectives of the privatisation of distribution business is to run it in a viable, efficient and commercially sustainable manner. It was expected and rightly so that a private investor should be able to infuse capital to make necessary investment in network so as to reduce transmission and distribution loss.”
“It was also expected that the efforts should be made to ensure that every end user of electricity pays for it”, the order said. Yet, the distribution companies, which were in business since April 1, 1999, even after 15 years of operation “have consistently failed to run the enterprise in a commercially sustainable manner”, the regulator said.
“The main reason is the total inability to realise costs from end users and reduce distribution loss by making necessary investment and initiating administrative reforms. instead of reducing loss gradually over a period of nine years the loss has remained more or less constant and in some years it has increased and thus there has been no improvement”, it added.
Ordering handing over the management of the three companies to the Odisha government-owned Grid Corporation of Odisha (Gridco) “in order to ensure the maintenance of continued supply of electricity in the Northern, Western and Southern Zone”, the order said, overall control would be of the principal secretary, department of energy, Government of Odisha.

Comments

Sattvik Food Festival: Shouldn't one question notion of purity, cultural exclusion in food choices?

Recently, I visited the Sattvik Food Festival, an annual event in Ahmedabad organized by Anil Gupta, professor emeritus at the Indian Institute of Management-Ahmedabad (IIM-A). I have known Prof. Gupta since 1993, when I sought an appointment to meet him a few months after joining The Times of India in Ahmedabad—one reason why I have always been interested in the activities he is involved in.

In lieu of tribute to Pritish Nandy, said to be instrumental in collapse of Reliance-controlled daily

It is widely reported that Pritish Nandy , journalist, author, animal activist, and politician, has passed away. While it is customary to pay tributes to a departing soul—and I, too, have joined those who have posted heartfelt condolences on social media—I cannot forget the way he treated me when he was editor of the Reliance-controlled Business and Political Observer (BPO), for which I had been working informally in Moscow.

Challenging patriarchy? Adopting maternal and marital surnames: Resistance continues

Anandiben Patel The other day, I was talking with a group of family friends. The discussion revolved around someone very close to me who had not changed her official name in documents, including her Aadhaar and passport, after her marriage. However, on social media and within her husband's family, she had adopted her husband's surname as a suffix to her own. I mentioned that there is a growing trend—though not yet widespread—where women prefer to retain their maiden names or add their maiden surnames alongside their husband's surname. Another emerging trend is where men choose to add their mother's name, or even their wife's name, to their own. This revelation surprised my family friends.

To be or not to be Sattvik: Different communities' differing notions of purity and fasting

This is a continuation of my last blog on Sattvik food. When talking about Sattvik, there is a tendency to overlook what it may mean to different sections of people around the world. First, let me redefine Sattvik: it means having a "serene, balanced, and harmonious mind or attitude." Derived from the Sanskrit word sattva, it variously means "pure, essence, nature, vital, energy, clean, conscious, strong, courage, true, honest, and wise." How do people achieve this so-called purity? Among Gujarati Hindus, especially those from the so-called upper castes who are vegetarians, one common way is fasting. On fasting days, such as agiyarash —the 11th day of the lunar cycle in the Vedic calendar—my close relatives fast but consume milk, fruit juices, mangoes, grapes, bananas, almonds, pistachios, and potato-based foods, including fried items. Another significant fasting period is adhik maas. During this time, many of my relatives "fast" by eating only a single me...

Shyam Benegal's Mathan a propaganda film that supported 'system'? No way

A few days ago, I watched Manthan, a Shyam Benegal movie released in 1976. If I remember correctly, the first time I saw this movie was with Safdar Hashmi, one of the rare young theater icons who was brutally murdered in January 1989. Back then, having completed an M.A. in English Literature from Delhi University in 1975, we would often move around together.

Barred premise allowed? 'Modi govt fails to seek release of fishermen languishing in Pak jails'

Are the Indian authorities or their Gujarat counterparts softening their stance toward NGOs that flag human rights concerns? I can't say for sure, as only recently the foreign funding license of one of the most prominent NGOs, Janvikas, headed by the well-known civil society leader Gagan Sethi, was canceled. This NGO has been working on livelihood issues for underprivileged sections of society for several decades.

Would Gujarat Governor, govt 'open up' their premises for NGOs? Activists apprehensive

Soon after I uploaded my blog about the Gujarat Governor possibly softening his stance on NGOs—evidenced by allowing a fisherfolk association to address the media at a venue controlled by the Raj Bhawan about India’s alleged failure to repatriate fishermen from Pakistani prisons—one of the media conference organizers called me. He expressed concern that my blog might harm their efforts to secure permission to hold meetings on state premises.

No to free thought? How Gujarat's private universities are cowing down their students

"Don't protest"—that's the message private universities across Gujarat seem to be conveying to their students. A senior professor told me that students at the university where he teaches are required to sign an undertaking promising not to engage in protests. "They simply sign the undertaking and hand it over to the university authorities," he said.

Beyond the Sattvik plate: Prof Anil Gupta's take on food, ethics, and sustainability

I was pleasantly surprised to receive a rather lengthy comment (I don't want to call it a rejoinder) on my blog post about the Sattvik Food Festival, held near the Sola Temple in Ahmedabad late last year. It came from no less a person than Anil Gupta, Professor Emeritus at the Indian Institute of Management-Ahmedabad (IIM-A), under whose guidance this annual event was held.

Search This Blog