Letter by All India Power Engineers Federation (AIPEF) to Power Minister of Government of India
No. 69 – 2024 / Privatization of Chandigarh
23 – 11 – 2024
Sri Manohar Lal Khattar
Hon’ble Power Minister
Govt of India
New Delhi
Sub: Gross Irregularities in procedures for privatization of UT Chandigarh, Electricity Wing.
Respected Sir,
From the press reports of 23 November 2024 on privatization of UT Chandigarh Power Department, the All India Power Engineers’ Federation (AIPEF) has observed several irregularities which are summarized as under.
- Auditor report dated 12.05.2022 for Eminent Electricity Distribution Ltd. (EEDL) for the year ending 31.03.2022.
The Independent Auditors report of M/s. Batliboi, Purohit & Darbari, Chartered Accountants dated 12.5.2022 is attached, and may be seen.- At annexure A the Audit Report states
- The Company does not have any property, plant, and equipment
- The company does not have any intangible assets.
- The company does not own any immovable properties.
- The company does not have any inventory.
- The company has not been sanctioned any working capital limits at any times during the year, from banks or financial institutions.
- The company has not accepted or is not holding any deposit or amounts which are deemed to be deposits.
- At annexure A the Audit Report states
Comments: The company, Eminent Electricity Distributions Ltd has recently been awarded LoI, (Letter of Intent) for privatization of Electricity Distribution in UT Chandigarh. This Involves maintaining and operating the distribution of electricity to consumers/ public of UT Chandigarh, However, as per Audit Report the company does not have any requisite plant, equipment, tools and plant and spares, O&M accessories or spares, which are necessary for electricity distribution. This means that in case of any fault or disruption of power the company would utterly fail to maintain power supply in UT Chandigarh (in absence of necessary plant, T&P etc.)
Comment 2: On the other hand, the electricity distribution system of UT Chandigarh has been efficiently operated and maintained by the existing staff of UT Chandigarh under public sector management, and there was no ground to privatize.
Comment 3: The auditor’s report dated 12.05.2022 contains the following statement in the section titled Corporate Information
The statement is quoted as under
“The company is in the business of investment in power companies”
This statement establishes and proves beyond doubt that the company Eminent Electricity is not in the business of electricity distribution, and instead its business of investment in power companies.(Ref page 14 of 22 Page Audit Report)
The work of investment in power companies as admitted, means that the company EEDL has NO EXPERIENCE IN ELECTRICITY DISTRIBUTION, and its experience is only in investment in power companies. There has been a gross blunder by the UT Administration in issuing LOI to a company which is in the field of FINANCE – investment whereas the job requirement is of electricity distribution. Clearly EEDL has a NIL track record in electricity distribution O&M, management of distribution systems etc.
EEDL has nowhere quoted or given details of its track record on electricity distribution.
Comment 4: Irregularity in Processing tender:
In processing the bids issued by various competing Cos, the administrative approval was given by UT Chandigarh officials for the distribution project of ₨. 174.63 CR while the power to sanction such cases by UT / Chandigarh was ₨.100 crore. Thus the entire processing of bids suffers from a huge blunder of misuse of authority and over stepping in sanctioning limits. On the ground alone the LOI should be cancelled / withdrawn.
Comment 5: The UT Administration in processing the bids did not get the advice of CEA, CERC and JERC which is a requirement of Electricity Act 2003. This amounts to bypassing the statute, which renders the entire exercise as faulty / defective/illegal. The advice should have been taken from CEA (Section 73) CERC (Section 81, and JERC (Section 86). Bypassing the statute was not justified in any way.
PART –II:
There has been a huge reaction from the electricity consumers of UT Chandigarh who apprehend that the privatization would lead to costlier power and decline in consumer service under the EEDL regime. There is a demand of consumers that LOI should be withdrawn / cancelled as there is no ground to discontinue with public sector working.
PART-III:
The past record of public sector working in UT is summarized as under which establishes efficient and profitable working spread over years.
PART-IV:
All India Power Engineers’ Federation (AIPEF) is to inform that Govt. of India / UT Chandigarh have created a man-made crisis by way of the privatization matter. There was no basis or ground to upset a smoothly running distribution system under public sector management of UT Chandigarh. There is already a public outcry that the private party is coming only to plunder huge profits at the cost of consumers- which must be guarded against. The fact that this EEDL company has no track record or experience has set the alarm bells ringing – which must be heeded by the UT Administration and the LoI must be withdrawn immediately.
Regards.
Yours Sincerely
Shailendra Dubey
Chairman