Oppose the Privatisation of Electricity Distribution!

Eleventh meeting organised by Kamgar Ekta Committee in the series “Unite Against Privatisation!”

Kamgar Ekta Committee (KEC) organised a public meeting on 25 April 2021 to oppose privatisation of electricity distribution. This was the 11th meeting in the series “Unite against Privatisation”. Previous meetings dealt with privatisation of railways, banks, insurance, coal, petroleum, port & docks, education sectors.  These meetings are being organised with the aim of bringing together various unions and federations of public sectors in a common struggle against privatisation.

Welcoming the speakers and participants, Com Mathew, Secretary of KEC, said we are meeting at a time of a national Covid pandemic crisis which was entirely due to the negligence of the Central government. Thousands of frontline workers from electricity, health, railways, banks, insurance, coal, steel and other sectors have fallen ill and also become fatal victims. But the workers from these sectors have continued their service to society, braving all these hardships.

Com Mathew invited Com Girish of KEC to give the first presentation. The presentation gave the background of electricity privatisation in the country and the experience of different states and territories. (See “Oppose the Privatisation of Electricity DistributionPresentation by KEC)

The presentation was followed by the speeches of Shri Shailendra Dubey, President, All India Power Engineers Federation (AIPEF) & Convenor, Vidyut Karmachari Samyukta Sangharsh Samiti, UP, Com Mohan Sharma, Secretary General, All India Federation of Electricity Employees (AITUC) and President, Maharashtra State Electricity Workers Federation (AITUC),  Com Prashanta Chowdhari, Secretary General of Electricity Employee’s Federation of India (CITU), Shri Abhimanyu Dhankhar, Secretary General, All India Federation of Power Diploma Engineers and State President, Haryana State Electricity Board Diploma Engineers Association and Com Krushna Bhoyar, National Secretary, All India Federation of Electricity Employees (AITUC) and General Secretary, Maharashtra State Electricity Workers Federation (AITUC). The highlights of their speeches are given in the accompanying boxes.

Many speakers pointed out that taking advantage of this pandemic, the government is trying to pass the Electricity Amendment Bill 2021. It is due to opposition of all workers that these attacks of government have been successfully resisted. From state level unions to All India unions, all are opposing privatisation. In UP, workers have managed to stop electricity privatisation. Many strikes were carried out to stop privatisation in Maharashtra and all over India.

All public sector companies are facing privatisation. Workers of each sector are fighting vigorously. If all  workers come together under one banner, we shall be able to halt the government’s privatization program.

Speakers expressed the need to make consumers a part of the struggle against privatisation. For this, awareness about ill effects of privatisation has to be spread among the masses.

Speakers paid homage to electricity workers as well as engineers, who lost their lives while maintaining uninterrupted electricity to hospitals. Electricity officials and workers have been asked to work without providing them proper safety kits. Speakers demanded that electricity workers must be treated as frontline corona warriors by the central as well as all state governments and that the families of those who have lost their lives, must be suitably compensated.

Speakers thanked the KEC for organizing the series against privatization so that unity of various public sector workers could be built.

After the federation leader’s speeches, a large number of participants also expressed their views. A young activist of KEC made an audio-visual presentation where he showed the protests that took place in Kalwa, Thane, against privatisation of electricity distribution. Two and a half years back, KEC and LRS (Lok Raj Sangathan) came together along with other people’s organisations to oppose the handing over of electricity distribution in Kalwa, Mumbra and Shil area to Torrent Power. Mass leaflet distribution was organised explaining about the ill effects of privatisation. People quickly understood and more than 5000 signatures could be collected in a few days. A 10 km long morcha from Kharegaon to Kalwa was also organised. As a result of this, the government had to put a stay on Torrent for a year. But, during last year’s lockdown, the government handed it over to Torrent. The campaign also showed that major political parties cannot be relied upon in these fights. Congress, NCP and Shiv Sena were in the opposition in the Assembly at the time of the agitation and supported it, but after coming to power, they are implementing the very same privatisation agenda!

The active interventions of many others and their enthusiasm extended the meeting to nearly four hours.  Concluding the meeting Com Mathew announced that the next meeting in the series against privatisation, the 12th meeting will be against the privatisation of Rashtriya Ispat Nigam Limited (RINL), Vishakhapatnam.

Highlights of the speech of Shri Shailendra Dubey, President, All India Power Engineers Federation (AIPEF) & Convenor, Vidyut Karmachari Samyukt Sangharsh Samiti, UP

The breaking up of State Electricity Boards (SEB’s) into generation, transmission and distribution companies that began nearly two decades back was just an intermediate step towards privatisation.

Since 1999 Odisha Electricity Distribution went from public to private and back to public and then again back to private in 2020! The government has continued in its effort of privatization despite repeated failures of private companies to fulfil their commitments. Transmission and Distribution (T&D) losses did not come down nor were the promised capital investments made. On the contrary, the government had to incur heavy losses when it was forced to take the distribution back in its hands.

Another privatisation model has been to hand over the distribution business in certain areas, especially urban pockets, to private entities, called franchisees. The experience with franchisees between 2007 and 2012 has been disastrous in most cases. Only in Bhiwandi in Maharashtra has it been declared “successful”. The “success” in Bhiwandi has been achieved at the cost of customers and workers. Customers are over billed by Torrent and customers have companied that the company uses musclemen to recover dues. Most of the workers are hired on contract, and made to work without any safety equipment. A large number of such workers have died of electrocution.

In Agra, after the takeover by Torrent, AT&C losses increased from 58.77% to 61.44% in 2010–11. In Aurangabad and Jalgaon, the franchise awarded to GTL Ltd and Crompton Greaves Ltd respectively had to be cancelled due to non payment of dues to the Discom. In Nagpur and Kanpur, the franchise awarded to Crompton Greaves Ltd and Torrent Power Ltd respectively had to be cancelled due to delay in takeover. In Ujjain, the franchise awarded to Essel Utilities had to be cancelled due to poor service quality and protests from customers. In Ranchi and Jamshedpur, the franchise awarded to CESC Ltd and Tata Power Ltd had to be cancelled due to delay in execution.

Another method introduced by the Central Government to promote privatisation is to allow parallel licensing. This was first introduced in Mumbai where consumers can choose their power supplier.  Such a choice is claimed to lead to competition which increases efficiency and lowers tariffs. However, in actual practice the operation of parallel licensing in Mumbai has resulted in opposite results with skyrocketing expenses, steep consumer tariffs and regulatory failures.  Today the average tariffs of all DISCOMs in Mumbai are high and changing the supplier has not resulted in consumer benefits.

The new Electricity Amendment bill 2021 is expected to further boost parallel licensing even though the experience in Mumbai has been totally unsatisfactory.

Highlights of speech of Com Mohan Sharma, Secretary General, All India Federation of Electricity Employees (AITUC) and President, Maharashtra State Electricity Workers Federation (AITUC)

Over the past 4 years our Federation has taken a number of initiatives to inform electricity workers as well as customers about dangers of privatisation of electricity distribution by distributing thousands of booklets. We wrote to MPs and CMs of various states all over the country and told them about all the ill effects of privatisation of electricity distribution.

In Maharashtra, the Federation distributed 25,000 leaflets to consumers against the privatisation of electricity distribution in Kalwa, Mumbra region. This franchise model is not beneficial for consumers but the government has turned a blind eye to it.

This bill has clearly been made to benefit the corporate houses like Reliance and Tata.

Highlights of speech of Comrade Prashanta Chowdhari, Secretary General of Electricity Employees’ Federation of India (CITU)

The public sector was created as our capitalists were very weak at the time of independence to invest in capital-intensive industries such as electricity, railways, steel, coal, oil, telecom, aviation, port, etc. These sectors were funded by public money and developed. All high-tension electricity lines were developed and electricity generation capacity increased tremendously.

Now Indian capitalists have grown large enough to handle these sectors, whether electricity, railway and other sectors. When the Narsimha Rao government announced the new economic policy of privatization, liberalization and globalization in 1992, he claimed that the government is not having money so we need to invite private investment to get money. But in reality, companies from India and abroad invested very little of their money. It was Indian people’s money which was used, through bank loans. Whenever these private companies are in trouble, government companies are asked to save them and it’s exactly opposite for government companies. For example, BSNL is in trouble but the government is in no hurry to save it.

Now this cooked food is being served to capitalists for increasing their capital. This is how they are accumulating capital.

State Electricity Boards were asked to extend the electricity from cities to the remotest area of the country at the fastest speed, not only for the rich and for industries but also for the poor, the villagers and agricultural power. The Electricity Boards helped in bringing about the green revolution. Now they are being told that they are useless as they couldn’t make profit so they should be privatized.

Electricity Boards, railway and steel and other public sectors may not have made profit. But again, profit for whom? Profit for one company, profit for state or for the Indian economy?

As per the 2021 Electricity Amendment the right of our farmers to electricity is being slashed.

Highlights of the speech of Shri Abhimanyu Dhankhar, Secretary General, All India Federation of Power Diploma Engineers and State President, Haryana State Electricity Board Diploma Engineers Association

The government has been trying to amend the Electricity Act since 2014 but could not succeed due to united opposition of electricity workers. The Amendment brought in 2021 is the fifth attempt and is being pushed without consultation with workers or consumers or states.

This government is working at the behest of capitalists. All the provisions which are mentioned in the Standard Bidding Document (SBD), brought out in 2020, are only for benefits of monopoly capitalists.

In the meeting of 17th Feb, 2021, the Energy Minister said that inefficiency of discoms is the main reason for loss and not the government policy. It is difficult to understand how private players will bring the existing system to profit.  As mentioned in the SBD the government is planning to provide private payers the kind of facilities that are not given to state-owned distribution companies, and yet the government wants them to compete with private players!

The Electricity Act 2003 was supposed to result in “cheaper power for all” but the tariff was revised 7 times in Delhi since privatization.

The real purpose of the Electricity Amendment Bill 2021 is not just about providing the choice of electricity supply to the consumers after privatization but it is to allow non-discriminatory access to the existing infrastructure of discoms to private players. No private player will come in electricity distribution business to spend money in electricity infrastructure.

Presently, private generating companies are trying to sell power to people directly but they don’t have their own network. Now that all infrastructure has been built with public money, the super rich plan to reap profit out of it. The rent of land in use under state Discoms is huge at present market price but all these things are being envisaged to be given at rate of one rupee per month to monopolistic private super rich houses.

It is being said that state owned companies won’t vanish but BSNL’s example tells the reality. All private companies got 4G but BSNL didn’t get it. Private companies used BSNL infrastructure and have become super rich.

Similarly, they are eyeing electricity distribution. They aim to replace government monopoly with private monopoly.

Highlights of speech of Com Krushna Bhoyar, National Secretary, All India Federation of Electricity Employees (AITUC) and General Secretary, Maharashtra State Electricity Workers Federation (AITUC)

There are more than 15 lakh workers including those who work for contractors. Whether BJP or Congress, their policies are same. Electricity was the first sector which was proposed for privatization in 1990 and it was done through the Enron project. Electricity workers opposed it and due to the huge opposition, they had to cancel it but later they revived it again.

Today large-scale privatisation of electricity generation has been done. They are generating more than 176,000 MW (including thermal, wind and solar). At present, there is a surplus production of electricity of 100,000 MW. No one is purchasing this electricity and its cost is borne by the government distribution companies. Many a time government owned generation companies are stopped from generating electricity in order to purchase electricity from private electricity generating companies, despite their higher price.  In Maharashtra, out of Rs. 86000 crores revenue collected by DISCOMs, 85% goes into purchase of electricity and the rest is used for paying employees and maintaining infrastructure.

Electricity bill amendments have been brought to ensure that private monopoly capitalists can enrich themselves through distribution. Governments are fulfilling the agenda of monopoly capitalists.

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