DF, Opposition united on MSEB trifurcation

Govt bent on meeting December 10 deadline

Despite stiff opposition from unions, the Maharashtra government appears firm on the issue of corporatisation of the Maharashtra State Electricity Board (MSEB).

Both, the ruling Democratic Front (DF) alliance government and the Opposition, are believed to be in favour of the change.

If all goes well, the MSEB will cease to exist in its present form from December 10 in accordance with the commitments given earlier and the provisions of the Electricity Act 2003.

In all probability, the board will continue to function on a temporary basis discharging mandatory duties as the state Cabinet deliberates on the new structure of the electricity utility.

The new structure, if finalised, will be implemented from the next financial year for administrative convenience. A trifurcation of the power utility into separate corporations for generation, transmission and distribution is the most likely consensus, sources indicated.

As per Part XIII of the Electricity Act, 2003, which deals with reorganisation of state electricity boards, the property, rights and liabilities currently with the MSEB will be transferred to the state government. The government, in turn, will transfer these to a government company or companies. The company or companies will be formed and registered under the Companies Act 1956.

MSEB union leaders said that corporatisation of the MSEB is the first step towards privatisation. They are apprehensive of working under the private sector where job security will be performance related.

Private players have already entered the generation sector and the state is soon expected to start buying power from Enron after legal disputes are settled. The government has also given a green signal to MSEB to buy excess captive power from industries.

Several MSEB unions are going on strike on December 8 to pressurise the state government into seeking an extension for the corporatisation exercise from the Centre.

The unions are facing an uphill task because the Opposition is also in favour of MSEB's corporatisation. The National Democratic Alliance (NDA) government had passed the Electricity Act 2003, therefore, the Bharatiya Janata Party (BJP) and Shiv Sena (SS) are at present not opposing the corporatisation move, union leaders felt.

Narayan Rane, leader of Opposition in legislative assembly, on the eve of the winter session of the state legislature, said that the Opposition was not against trifurcation of MSEB. The government must ensure that the board employees do not suffer in the process.

Chief minister Vilasrao Deshmukh told media that the Centre has not granted an extension to MSEB. "What is the use of seeking an extension of another six months. All state governments have to follow the Electricity Act and hence corporatisation of MSEB is inevitable," he said.

Members of 24 MSEB unions have decided against participating in the strike on December 8, but said that they will sport black bands opposing the corporatisation move. Four unions are not supporting the December 8 agitation at all. The Tantrik Kamgar Union of MSEB, which has 42,000 members, has refused to take part in the strike along with three other unions.

Its general secretary Ranjit Deshmukh has supported the corporatisation process because he feels that working of MSEB cannot improve unless a drastic change is brought about in its structure.

MSEB was slated to be corporatised on June 10, 2004, but the then chief minister Sushilkumar Shinde, bowing to pressure from unions, obtained a six-month extension from the Centre as the assembly elections too were round the corner.

There are no electoral considerations now and therefore nothing much to stop the DF government from going ahead.

In May 2004, Jayant Kawale, chairman of the MSEB, had said that the internal reforms process of MSEB was a complete flop despite contrary claims of the unions.

He had pointed out that the increase in revenue of the board during the year 2003-04 was not due to internal reforms but due to Krushi Sanjivani Yojana. A plan for corporatisation of the MSEB has already been made long ago and only a Cabinet approval is required on the methodology to be adopted.