Electricity Amendment Bill 2021:
Power sector workers in struggle to oppose privatisation

Just recently, MEL’s reporter had talked to the leaders of the unions and federations in the power sector who were demonstrating at Jantar Mantar about their concerns and their demands. We are presenting here the main points of two interviews: with Abhinmanyu Dhankar, the National General Secretary of the all-India Power Diploma Engineers Federation and Shailendra Dubey, President of the All-India Power Engineers Federation


Engineer Shailendra Dubey

Mazdoor Ekta Lehar (MEL): The government is trying to pass the Electricity Amendment Bill 2021 in the parliament today. Why are you opposing this?

Shailendra Dubey (SD): We are opposing it because this Bill is solely for the benefit of the big private business houses. It is going to hurt the peasants, the poor and domestic consumers the worst. This Bill is for privatising the entire electricity distribution service. This bill is organising to end the system of licensing power distribution. This means that it will be possible to obtain permission to distribute  power in any location. Take these wires and poles – these supply networks have been erected and set up by the government, and now the private companies can use them to distribute electricity. They do not have to invest a paisa. The government has already invested thousands of crores of rupees and the private companies can use this to make its profits.

The disaster will be that while the government provides electricity to peasants and poor consumers and it is its duty to do so, this Bill provides that the private companies will distribute according to their will. Obviously, the private companies will distribute to the most profitable consumers. It will focus on institutional and industrial areas and the government sector will lose the areas that have potential for profit. The outcome will be that government electricity distribution companies will become bankrupt and electricity will become unaffordable for the consumers.

If a peasant has a 5 hp pump that he runs for 6 hours, he will have to pay a bill of at least Rs.10,000. This law is only in the interest of the corporate houses. That is why a 4-day dharna has been organised in Jantar Mantar, and a call has been given to observe a nation-wide strike on 10th August.

MEL: From what you have said, it appears that this Bill is for giving private players full freedom to make profits. What are the specific provisions that will facilitate or enable this?

SD: I will repeat – the electricity infrastructure like the substations, the transformers, the switchgear, the wires and the poles will all be turned over to the companies. They will use this very infrastructure to supply electricity. So, there will be no need for them to invest in any infrastructure, the government has already spent thousands of crore rupees. This is the first advantage – they will get the network for free. The other issue is that wherever we have an obligation to do so, we supply power free or at a concession, notwithstanding how little or how much power they actually consume. Private companies have been given the freedom to deny concessions to any ne. This implies that the private companies will only operate in areas of potential profit.

MEL: The government claims that this Electricity Amendment Bill is a step in the direction of bringing in major reforms in the power sector, but the power sector employees are opposing this. How would you call out this propaganda?

SD: The government is not prepared to discuss this. Till date, the government has not called either the electricity consumers or the employees for discussion. It is talking only to corporate houses and is fulfilling whatever conditions they demand. What is happening is clearly in their favour. We challenge the government to discuss with us. Cost of power is going to increase due to the Bill. After its implementation, cost of power is going to be at least Rs.10 per unit. Electricity distribution is privatised in Mumbai, and the cost of power is Rs.12-Rs.14 per unit there. The government is running away from discussion. It is my view that the government should not push this Bill through in a hurry. The Bill should be referred to a Standing Committee which should hear out the representatives of power consumers and employees.

MEL: What is the message you would like to send out to both rural and urban consumers of electricity through our paper?

SD: Consumers should understand that the price of electricity is going to become at least Rs.10/unit. Subsidies will be eliminated. Our appeal to the consumers is that they should fully support the struggle of the 15 lakh power sector employees who are opposing this disastrous anti-people Electricity Amendment Bill.

MEL: Thank you, and wishing your struggle success.


Shri Abhimanyu Dhankhar

Mazdoor Ekta Lehar (MEL): How will private companies benefit from the Electricity Amendment Bill

Abhimanyu Dhankhar (AD): Section 24A, 24B, 24C and 24D have been clearly inserted for this purpose. Minister of State for Power Shri RK Singh ji has clearly said that we will implement de-licensing of power distribution. That is, those who are selling electricity will not need any license. Our biggest objection to this proposed action by the government is that the network which has been built investing lakhs of crores of rupees for electricity distribution since independence, built with the tax-money paid by the public during the last 75 years, that network will be used by private companies to sell electricity. They will not take any responsibility for setting up a new network.

Claims being made in public regarding providing the consumer a choice – the option to choose the distributor or supplier of electricity, is absolutely false, baseless and utter nonsense. It is not as if there are towers of two different companies – one ours and the other of the private company, standing in the same street and the consumer can select one. If that is the case, then there is competition. But the reality is that our competitor has been given a free hand; he doesn’t have to invest anything. For my “competitor”, there is “No Pain; Only Gain” (Profit without investment).

MEL:  Once this becomes a law, what will be its impact on consumers in rural and urban areas?

AD: You have asked an excellent question. The private companies enter the market for making profits, they do not enter the business to make losses. Today, we are facing an extremely grim situation in the rural areas – the government itself says – that during Corona, more than 80 crore people are forced to live on the food-grains, what is being provided through public distribution systems (PDS). The reality in our country is that people belonging to the marginalized and the exploited classes, the people living below the poverty line, etc. – they can-not afford to pay the full cost of actual cost of electricity for domestic use. For that purpose, there is a provision of cross subsidy in the Electricity Act 2003. Cross-subsidy means that if a distribution company buys electricity at Rs 6 per unit, then it sells to companies or industries at Rs 7 per unit and to those consuming less than 50 units per month at Rs 2 per unit only, and to those who consume less than 100 units per month at Rs 4 per unit, etc. In this way, taking a little more money from the rich who can afford higher price, it supplies electricity to the poor people at affordable prices.

Our Minister of State for Power, R.K. Singh ji has told that we will limit the cross subsidy to 20 percent only. It means that if we are purchasing electricity for Rs 6 per unit then we will provide it to the rich for Rs 7 per unit, whereas we will not be allowed to provide it to poor for less than Rs 5. So those who are getting electricity for one and a half rupees per unit today, they will have to pay 5 to 6 rupees per unit. It means that they will be deprived of the right to access electricity. They will not be able to access electricity at affordable prices. Electricity will become a luxury good, a privilege which only rich will be able to afford.

For example, 2 to 4 years ago, petrol and diesel were de-controlled – means it was taken out of the control of the government. As long as it was under government control, its prices did not rise to such exorbitantly high levels as we are witnessing today – when it is out of government control. Now you connect the policy of de-controlling petrol and diesel with de-licensing of electricity distribution. To put it bluntly and clearly, electricity distribution is a business worth Rs 7 lakh crores, and that is what these capitalists are aiming to acquire. They want to procure this business and the associated profits, without any investment on their part.

There are such atrocious provisions in this bill that if you look at them in detail, you will wonder who thought of these kinds of provisions. For illustration, there are provisions in these documents that all the infrastructure of state discoms, existing in a particular province, will be handed over to the private companies at a rent of Re 1 per month only. These provisions are exactly similar to what is being provided for, in order to sell Rail and Oil companies, in the name of asset monetization.

Honourable Prime Minister says that “the business of the government is not to be in business”. But we, the workers of the electricity sector say that what we are doing, is not business, this is service. Electricity is a matter of providing service to the needy, not to make profits through a business.

If you are interviewing me today, you are able to do it because of electricity. The battery in your phone is charged with electricity. If you take it further and examine the various facets of our life, you will see how important electricity is. In order to ensure electricity supply during the Corona period, more than 1,000 electricity workers have lost their lives. Electricity workers have ensured uninterrupted power supply. Has it been reported by any news channel that people died due to non-availability of electricity in a hospital? There have been many reports that people have died due to lack of oxygen. But no death has been reported due to power outage. The government today wants to snatch away the rights of the electricity workers as if at present, it is a gift to the workers, for their hard work. We oppose this move.

MEL: The government is saying that if this bill is passed, it will result in the growth of the power sector and the electricity workers are unnecessarily opposing it. How would you respond to this propaganda?

AD: There will definitely be growth. There will be an unprecedented growth in the total wealth of the capitalists. The electricity distribution infrastructure of the country worth lakhs of crores of rupees will be directly handed over to the big private capitalist families, active in the power sector and within the next five to seven years, they will own it. And that too, without spending a penny of their own. Let me explain, how.

As I said in the context of cross subsidies, there are different types of consumers of electricity – some industrial consumers have bills amounting to even Rs 50 lakhs a month, while poor consumers may have bills of only Rs 200 per month. After privatization, the big capitalist owners of this sector, will provide connections to rich consumers but they will not provide meter connections to those who pay only Rs 200 per month. The capitalist owners have the choice to choose their consumer. We have no choice. Being a government company, we have to provide connections to everyone, whether it is Adani’s company or someone who is poor but asking for electricity connection. We have to provide connections to both. But the private company owning the business of electricity distribution, has the freedom to whom it will provide connection and to whom it will not. Surely, they will be glad to provide electricity connections to rich consumers. As a result, gradually, all the big connections will go to the private distribution companies.

The same story will repeat – just like it happened in the telecom sector. Reliance’s Jio company announced a scheme whereby access to the internet was free for a year. What was the impact? Forget a government company like BSNL, even private companies like Vodafone and Idea were forced to merge for survival. Similarly, any big capitalist owner will start such a scheme by taking loan from banks or using subsidies. To increase its popularity and its reach, initially the rate of electricity may be kept low 20 to 50 paise lower than normal. Our big rich consumers will make the transition from a government company to the private company. What was a public monopoly till now, will be transformed into a private monopoly? Public monopolies do have social concerns, they want to provide service to the people, but what are the benefits of private monopolies to the society? None.

Just look at the hospitals. Treatment is possible for all people in government hospitals, but can a poor man go to private hospitals? So private monopoly is a threat to democracy. Those who are talking of growth, are they talking of additional investment? In 2003 also, they talked about investments. In the Electricity Act 2003, it was stated that the reforms in the power sector would bring in new investments. Did the investments bring down the electricity rates?

As of today, 47 percent of the electricity generation is in the hands of private capitalist owners and the remaining 53 percent is with the state and central governments. But the electricity rates are increasing continuously because these private houses have entered into Power Purchase Agreements (PPA – Electricity Purchase Agreement) of 25 years duration, providing electricity at exorbitant prices. If the government wants to do something for the consumers, then it should renegotiate these agreements according to the present situation and the cost scenario. You will be surprised to know that today electricity is available in the power-trading market at Rs 2.5 per unit, but power generation companies have entered into agreements, according to which they are selling electricity up to Rs 15 per unit. So where is the public money going? If the electricity distribution company buys electricity at such exorbitant prices, it will recover that cost from the consumer and not anyone else.

In fact, the government should do two things. One, that access to electricity should be declared a fundamental right. And second, all those PPAs, which are still valid and where the cost of electricity being charged is unrealistic in today’s conditions, all those agreements must be renegotiated so that the public can access cheap and excellent electricity-service.

If the government wants to provide better electricity service to the people, then it has to meet and discuss with the representatives of all the stakeholders in the energy sector including the National Co-ordination Committee of Electricity Employees and Engineers (NCCOEE). I say this with full responsibility that we will not oppose this bill if there is any mistake or if there is no truth in what we are saying.

MEL: What is the next stop in your struggle for justice, or what is the way forward?

AD: As we have learnt through news channels that Hon’ble Energy Minister has announced that the Electricity Amendment Bill 2021 will be introduced in the monsoon session of Parliament, then we in NCCOEE, held a meeting on 12 July and passed a resolution that this law is going to take away the people’s right to electricity and we should not allow it to be passed. For this we will intensify our struggle further.

We have been fighting since 2014 against the privatization of the power sector. From 2014 till today (2021), this is the fourth attempt of the Central Government towards privatization. The Electricity Amendment Bill was brought in 2014, 2018 and 2020. Now the Electricity Amendment Bill 2021 is the government’s fourth attempt to organize complete privatization of the power sector.

As decided by us, in the first phase, to attract the attention of the government, a protest day was organized on 19th July all over the country. After that on July 27, the NCCOEE delegation met the Energy Secretary, Hon’ble Alok Kumar ji and submitted its memorandum. We had a brief conversation with him. After that, we have organized the protests on 3rd, 4th, 5th and 6th August to attract the attention of the Ministry of Power to listen to our demands. Electricity workers from all over the country are in support of these demands and we have come to Delhi to talk with those responsible in the government. But if they don’t listen to us, don’t take any action on it and/or try to table the Bill in Parliament unilaterally without any prior discussion with us, then there is going to be a strike of all electricity workers on 10th September in which more than 15 lakh electricity workers and officials will participate and also more than 12 lakh contract workers will be with us to participate in this national strike. And if the government tries to push this bill in Parliament before that, then the program scheduled for  will start from that day itself.

MEL: You have provided us excellent information about your struggle. We wish you all success in your just struggle.

 

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