LI NETWORK
High Court of Punjab and Haryana stayed the government proposal privatizing DISCOM. The High Court issued order in UT Powermen Union of Chandigarh’s petition on privatizing DISCOM by Central government.
The stay order was issued on the grounds presented by the Powermen union which included beneficial profit statement of the company, excellent revenue surplus of last three years, good transmission and distribution losses in accordance to the target set by the Ministry of Power.
Highlighting onto the disadvantages of the move, by citing a provision in the Electricity Act, 2003, which states that a power department or utility cannot be transferred to a private entity, leaving no stake available, they further persuade that privatizing the electricity wing on selling 100% of its stakes is not sustainable.
They also stated that the decision was taken without the consent or approval of any of the member of the Board.
The High Court on hearing the matter stated that the matter needs further deliberation and discussion, and thus will be heard after 6 months.
Further in November 2019, the Chandigarh administration presented the proposal which invited qualified entities to acquire DISCOM with 100% of its shares, on bidding process.
Later, in May 2020, the Central Government came up with proposal for privatizing DISCOM in every UTs, following which Tata company took over the Central Electricity Supply Utility of Odisha (CESU).
Thus, the step seemed advantageous to a wide range of entities, as has been supported by Mercom’s study which stated that privatization of DISCOMs could help them to get out of their financial troubles and will provide keystone to flourish the Indian power sector further.