Former MP M. Ramadoss | photo credit: kumar ss
Former Puducherry MP M. Ramadoss in his affidavit filed in the Madras High Court for his decision has refuted the arguments given by the regional administration Puducherry to privatize electricity department (PED).
In a statement, the economist-turned-former MP argued that the privatization of the department was due to its cumulative losses, not justified.
He alleged that the government had suppressed several facts by giving a figure of Rs 780 crore as the cumulative loss of the power department. “The figure is distorted and it presents a grim picture of the department to the public while justifying privatisation. Firstly, it is a cumulative loss and not an existing loss accumulated over decades which can be dealt with through various well known methods of financial restructuring. Privatization is not the first solution. Secondly, the cumulative loss is the excess of cumulative expenditure over cumulative revenue which includes arrears of electricity revenue payable to the department,” he argued.
The dues of the department till March 31, 2022 stood at ₹486. 43 crore (private consumers ₹191.95 crore; government departments, undertakings and local bodies, ₹294.48 crore). Taking into account this revenue, which is due to the government, the actual cumulative loss would be only about ₹293 crore. He said it was a mystery why the revenue of Rs 486 crore owed to the government was not deducted from the cumulative loss.
‘Department Modernization, Efficiency Improvement’
The department was in the process of turning into a profit making organization in recent years through modernization and improvement in efficiency. For example, during the three year period from 2017-18 to 2019-20, the department has earned a profit of ₹49. 18 crore and the situation was likely to improve keeping in view the changing supply demand scenario.
The central government had recommended privatization in those public utilities where the aggregate technical and commercial losses were more than 15%. Puducherry’s loss percentage for FY 2021-22 was only 11.50% which is less than the prescribed 15%. Besides, the UT is not a generator or producer of electricity and hence the question of much operational and financial inefficiency and consequent loss in generation does not arise, he said.
At present, the consumer satisfaction in the UT was quite high. He said that the per capita consumption of electricity is now as high as 2031 KWH, which is the highest in India and the per unit cost is probably the lowest in the country.
‘Electricity will be more expensive’
“The cost of power is low as PED has relatively cheap power available at subsidized rates by central sector power stations, as it is a central government sector. This huge advantage will disappear once a private player enters the sector and the private The power will be sourced from the region and the central stations will not provide power at subsidized rates to the private player. As a result, there will be a hike in the tariff and no statutory power from the Joint Electricity Regulatory Commission or the government will force the private company to sell below cost,” said in the statement.
The argument that third party consent was not required is adding insult to injury as the real owners of the department are the people of Puducherry. He said huge infrastructure has been built with taxpayers’ money.