Employees’ associations pose hurdle in Bihar, Jharkhand, Punjab
The Union government’s six-year initiative to unbundle state electricity boards (SEBs) into separate entities for generation, transmission, distribution and trading businesses, is nearing completion.
Kerala, Tamil Nadu, Himachal Pradesh and Bihar are finally set to float separate power entities as prescribed under the Electricity Act, 2003. Jharkhand and Punjab are the only states still struggling with the unbundling process, that is aimed at improving the financial health of utilities.
“The restructuring of Kerala SEB will happen within three months,” said A K Balan, the state’s electricity minister. “It will comprise one public sector company, since the Act allows keeping one entity under the complete control of the state government. This is the best method that can be the Kerala government can adopt.”
The ministry of power had earlier this year given these states what was being called a final deadline of December 15 to unbundle their boards. Many earlier deadlines have been breached. “The Tamil Nadu SEB will be unbundled by mid-December. We have already registered the transmission company and the company for generation and distribution is in the process of being registered,” said P W C Davidar, energy secretary (additional charge) of Tamil Nadu.
Himachal Pradesh, too, is hopeful of finally meeting the deadline. “The HPSEB has already been undundled in parts. Only some issues remain. We have already made a generation company called Himachal Pradesh Power Corporation Ltd. Also, we have Himachal Pradesh Power Transmission Corporation Ltd,” said Asha Swarup, the state government’s ’s chief secretary, currently handling the additional charge of power. The state is under the process of registering a distribution arm.
Bihar, where the proposal has so far been opposed by the employees association, seems hopeful about a final decision soon. “The proposal is under process. We hope to meet the deadline. Though, we are yet to take a cabinet decision,” said a senior official from the state’s energy department.
While it is employee opposition that has stalled unbundling in Jharkhand, the lack of consensus is also acting as a hurdle in Punjab. “We have not yet approached the cabinet. The employees association has filed a writ petition in the Supreme Court. But we are committed to do it, sooner than later,” said N N Pandey, the governments’ renergy secretary.
The Punjab cabinet is yet to take a decision on the issue. “As of now, there is no consensus. Only informal discussions have taken place in the cabinet,” said a senior official from the power department. Asked if the unbundling of Punjab SEB could happen by December, the official said, “I don’t think so, though an in-principle decision might be taken.”
The employees of SEBs have been opposed to unbundling, as they fear it would lead to privatisation and subsequent job losses. There is also a fear of accountability. “If each function is given to separate companies, it becomes easy to identify who is losing how much money and where. But in a SEB structure, all accounts remain common for transmission and distribution, and there is no accountability,” said a source close to the development.
Experts say internal reforms must accompany unbundling to make it effective. “Unbundling by itself is no solution. It has to be accompanied by good corporate governance. In some states, the results have not been satisfactory even after unbundling,” said a senior analyst from an accounting and consulting agency.
