Hyderabad: The Telangana Electricity Engineers Association (TEEA) has come down heavily on the draft Standard Bidding Documents (SBDs) issued by the Centre for privatisation of distribution licensees or discoms which is one of the crucial amendments proposed by the Union government to the 2003 Electricity Act.
“The SBDs literally sound the death knell for State discoms since private players will take over all the assets without liabilities,” TEEA president N Sivaji told ‘Telangana Today’.
Notwithstanding the growing opposition to the draft Electricity Amendment Bill 2003, the Union Power Ministry on September 20 issued the draft Standard Bidding Documents (SBDs).
However, the Ministry clarified that the proposals in the 179-page document for selection of bidders for purchasing majority shares in discoms for distribution and retail sale of electricity, are aimed only at initiating discussions and soliciting inputs from stakeholders by October 5.
The Ministry said the SBDs are for encouraging and supporting acceleration of Private Sector Participation (PSP) in power distribution utilities across the country. The SBDs consider a transaction structure in which assets of the existing distribution licensee, other than land, will be transferred to the new entity at the State Electricity Regulatory Commission (SERC)-approved Net Asset Value. Land owned or in possession of the existing distribution licensee shall be provided to the successor entity on a right-to-use basis at nominal charges.
On the other hand, the employees of the existing distribution licensee shall be transferred to the successor entity. Such transfer of employees shall be at continued or better service conditions. Further, the State or Union Territory concerned shall be responsible for all terminal liability obligations of such employees till their transfer date.
Sivaji said the draft makes the intentions of the Central government very clear that it was hell-bent to sell away all the assets of discoms of the States and UTs to private players. “The draft says that the successor entity shall be provided with a clean balance sheet free of accumulated losses and unserviceable liabilities, which means that the buyer will not take any financial responsibility of the discoms and they just want a clean slate,” Sivaji said.
The TEEA president further pointed out that the draft talks about transfer of all the discom staff to the successor entity. “However, the governments shall be responsible for all terminal liability obligations of such employees till their transfer date, like pensions and gratuity,” he pointed out.
The association also objected to the provision in the draft that says that up to 100 per cent of the urban power distribution and up to 74 per cent of the rural distribution can be handed over to private companies that adversely affects the cross-subsidies given to the poor and farmers by the Telangana government.
