Centre to go ahead with Bill allowing private players into power sector

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New Delhi: Amid stiff opposition, the Union Government will present the Amendment Bill in Lok Sabha seeking the removal of the licence system in the power distribution sector to pave way for private players.

Though the Bill was listed many times in Parliament sessions earlier, it was not presented. Those running the power sector at present are up in arms against the new amendment.

The Kerala Assembly unanimously adopted a resolution against the move to privatise the power distribution network on August 5, 2021. The West Bengal Government also opposed the move.

What is the amendment?

With this amendment, the Central Government is aiming to increase capital investment and competition in the power distribution sector. Once the new amendment is passed, the state electricity boards will lose their monopoly over the distribution of power. The amendment will enable any company to buy and sell power, and consumers the choice to opt for a service provider.

Criticism against the amendment

The main criticism against the amendment is that it would enable private players to take control of the power distribution sector. As per the new norm, the Central Government is the authority in fixing the eligibility of private investors. State governments and State Regulatory Commissions will have no control over them in the new scenario. There will be no licensing. Private participation will be encouraged.

Moreover, the service providers from the private sector will be able to gain control over the existing distribution mechanisms. They can also lay claim to a share of the total power being produced currently.

At the same time, private companies will have no responsibility to give power to all consumers. Due to the inclusion of such clauses, private players will limit their operations to towns. This may bring in financial losses to the State-owned distribution units.

It may also adversely affect the implementation of incentives like cross-subsidy, currently being made available to ordinary villagers.

The new amendment will allow new players to use the existing distribution system as per their liking. At the same time, the onus of maintaining the same distribution network will continue to lie on the shoulders of the power utilities working in the public sector.

Kerala's stand

Opposing the move, the Kerala government has raised the apprehension that the proposed entry of private players in the power distribution sector will lead to the total neglect of domestic consumers. This will also put the public sector power utilities in jeopardy.

State Electricity Minister K Krishnankutty urged the Centre to backtrack from the move while alleging that the new amendment would result in the deprivation of power for the common man and farmers in the long run.

The Kerala government had expressed its strong dissent to the amendment when the draft Bill was sent asking for the State's opinion.

Employees observe protest

Member of the Kerala unit of the National Coordination Committee of Electricity Employees and Engineers (NCCOEEE) boycotted work on Monday.

However, there was no boycott of work in places where flood relief and calamity relief works were going on.

Kerala Electricity Employees Confederation (affiliated to the INTUC) president Sibykutty Francis said that they too went on strike against the amendment. Samyukta Kisan Sabha also called for a strike on the matter.

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