State govt. urged to reject Tata Power bid for distribution licence

The Dharwad district unit of All India Kisan Khet Mazdoor Sangathan (AIKKMS) has urged the State government to reject the application of Tata Power Company Limited (TPCL) for parallel electricity distribution licence in 15 districts.

In a press release issued here, district secretary of AIKKMS Sharanu Gonawar has said that the around ₹40,000 crore losses being faced by the five State-owned electricity supply companies (ESCOMs) and the State government’s apparent interest in electricity privatization can push the agricultural sector into a crisis.

Therefore, the Karnataka State Committee of the All India Kisan Khet Mazdoor Sangathan (AIKKMS) is seeking the immediate rejection of the applications submitted by Tata Power Company Limited seeking parallel electricity distribution licence in the operational areas of the State-owned ESCOMs, namely BESCOM, MESCOM, HESCOM and CESCOM.

In the release, AIKKMS has said that If electricity distribution is handed over to private companies, welfare schemes such as Bhagya Jyothi and Kutira Jyothi, implemented for poor rural households, might be gradually discontinued, depriving the poor of access to affordable electricity.

The proposed move might result in discontinuation of seven hours of uninterrupted free electricity in villages as private companies might adopt a profit-driven “pay and receive” model.

Furthermore, after privatization, priority might increasingly shift towards industrial consumers, while rural areas receive less attention.

In a situation when farmers are already struggling due to the absence of remunerative support prices and are migrating to towns in search of livelihoods, if electricity becomes scarce and expensive, farmers might find it impossible to continue farming, the release said.

Karnataka already possesses an extensive electricity distribution infrastructure developed using public funds. Creating another parallel network of sub-stations, transformers and distribution lines in the same areas will result in unnecessary duplication of assets and wastage of resources.

Such duplication is economically inefficient and will ultimately impose additional costs on consumers through various charges and regulatory mechanisms, the release said.

AIKKMS will urge the State government to reject the application by TPCL and conduct a comprehensive and independent socio-economic impact assessment on the effects of granting parallel distribution licence, particularly regarding the cross-subsidy model and the financial implications for the State Exchequer, before considering such applications for public hearings, the release said.