Report of Vidyut Karmachari Sanyukta Sangharsh Samiti, Uttar Pradesh, and the resolutions adopted
Vidyut Karmachari Sanyukta Sangharsh Samiti, UP
Letter No. 504 / Struggle
22.06.2025
Proposal
A massive public movement will be launched against the privatization of Purvanchal and Dakshinanchal Electricity Distribution Corporations:
- On the call of the Vidyut Karmachari Sanyukta Sangharsh Samiti (UP), State Electricity Council Junior Engineers Organization (UP), Sanyukta Kisan Morcha, and consumer forums, a historic joint Bijli Mahapanchayat was held in Lucknow on 22 June 2025. In protest against the unilateral decision to privatize Purvanchal and Dakshinanchal Electricity Distribution Corporations, it was resolved to carry out a continuous and widespread public movement until the privatization decision is withdrawn.
- Before privatizing Purvanchal and Dakshinanchal Electricity Distribution Corporations, Uttar Pradesh Power Corporation Limited sent a proposal to the Electricity Regulatory Commission for exorbitant tariff hikes, putting crores of poor consumers and farmers at risk.
- According to the Power Corporation’s proposal, consumers below the poverty line will have to pay ₹400 per month instead of ₹300.
- Consumers with a 1 kW load consuming 100 units per month will have to pay ₹840 instead of ₹660; those with 2 kW load consuming 200 units will pay ₹1830 instead of ₹1345; those with 3 kW load with 300 units will pay ₹2830 instead of ₹2055; those with 5 kW load consuming 500 units will pay ₹5000 instead of ₹3575; and a 5 kW load consumer using only 200 units will have to pay ₹2400 instead of ₹1575 per month.
- This new tariff means that the electricity rate for below-poverty-line consumers will increase from ₹3 per unit to ₹4 per unit.
- For domestic consumers, the new rates will range from ₹8.40 to ₹12 per unit, and including electricity duty, rates will go up to ₹13 per unit.
- All these hikes are designed to welcome private corporations. It must be remembered that electricity is a service in the public sector but a business for corporate houses.
- Let’s take a look at the private electricity business: In Mumbai, Tata Power and Adani Power, and in Kolkata, the Goenka Group control electricity supply.
- While the maximum electricity rate for domestic consumers in Uttar Pradesh is currently ₹6.50 per unit, the private sector charges up to ₹15.71 per unit in Mumbai and ₹9.21 per unit in Kolkata.
- Private companies in Mumbai, Kolkata, and Delhi also levy many hidden charges; for example, in Delhi, there is a 7% surcharge for employee pensions, which further increases the effective electricity rates.
- In Uttar Pradesh, extremely poor people often cannot pay electricity bills on time due to very low income. The government sector periodically offers one-time settlement schemes to help them pay. No such scheme exists in the private sector.
- After installing prepaid smart meters, private companies will directly cut off electricity supply if bills are unpaid, plunging poor homes into darkness.
- Uttar Pradesh has 1,526,593 private tube wells with an average load of 7.67 horsepower each. Private companies do not provide free electricity to farmers. After privatization, a poor farmer running a 7.5 HP tube well for 10 hours a day will consume about 1,678 units per month. At an average rate of ₹10 per unit, the farmer will have to pay ₹16,785 monthly — a sum no poor farmer can afford.
- Privatization will turn Uttar Pradesh’s fertile land into a desert.
Our slogan is “Lead us from darkness to light.” Electricity in the public sector brings us out of darkness towards light; privatization brings the message of darkness. Privatization is a conspiracy to push Uttar Pradesh from a golden era of electricity to the lantern age. Farmers, laborers, and common consumers will never accept this. Privatization will not be allowed based on misleading and false loss figures.
- Power Corporation is using deceptive and false loss figures to justify privatization.
- On 1 April 2010, under the name of Urban Distribution Franchisee, the electricity distribution of Agra city was handed over to Torrent Power Company. This experiment has caused losses worth crores to the Power Corporation and continues to do so. In the fiscal year 2023-24, the Power Corporation bought electricity at ₹5.55 per unit and sold it to Torrent at ₹4.36 per unit. Selling about 2300 million units in this way caused a loss of approximately ₹275 crore in 2023-24. The average electricity tariff in Agra in 2023-24 was ₹7.98 per unit. Thus, Torrent Power made a profit of about ₹800 crore in one year, whereas the Power Corporation would have earned nearly ₹1000 crore if the electricity distribution had remained with it.
- Over the past 14 years, Power Corporation has suffered a loss of approximately ₹2,434 crore by selling electricity to Torrent Power at rates below purchase cost. Additionally, due to privatization in Agra, the Power Corporation’s revenue loss is at least ₹7,000 crore. This privatization model is a huge financial burden on the Power Corporation and the people of the state.
- On 15 November 1993, the electricity supply of Greater Noida was handed over to the Goenka Group’s Noida Power Company. As per the agreement, Noida Power Company was to set up its own power generation plant, which it has not done to date. Moreover, Noida Power Company is accused of exploiting consumers and violating contract terms.
- Noida Power Company has recovered bills older than three years from consumers. After complaints, the company was forced to adjust these amounts in consumers’ bills. Why impose this failed privatization model on 42 districts of the state instead of canceling it?
- The UP government is fighting a case in the Supreme Court to revoke Noida Power Company’s distribution license.
The second privatization experiment was in Odisha in 1999. The work of one distribution company was given to the American AES Corporation and that of three others was given to Reliance Power. After the super cyclone in the year 2000, the electricity system collapsed. America’s AES refused to invest in reconstruction and left for the USA within a year. The company’s distribution was taken back under government control, and the situation improved.
Reliance Power failed to improve the other three distribution companies in Odisha. Consumer exploitation and corruption persisted. An appeal was made to the Odisha Electricity Regulatory Commission, which canceled the licenses of all three companies in February 2015 and took over their control. Essentially, these companies also came under government control.
From 2015 to 2020, Odisha’s distribution companies operated well under government control, with the government investing crores. When the companies were in good condition, in June 2020, all four were handed over to Tata Power. Reports of consumer exploitation and employee harassment by Tata Power are frequent, forcing workers into strikes.
- Other privatization experiments under Urban Distribution Franchisees in Maharashtra (Bhiwandi, Aurangabad, Jalgaon, Nagpur), Madhya Pradesh (Sagar, Ujjain, Gwalior), and Bihar (Bhagalpur, Gaya, Muzaffarpur) have all failed and had to be canceled.
All privatization models in the electricity sector have been unsuccessful. There is no justification for imposing these experiments on Uttar Pradesh, the country’s largest state.
- When Agra’s electricity distribution was handed over to Torrent Power Company on 1 April 2010, the Power Corporation’s outstanding revenue in Agra was ₹2,200 crore. Torrent was supposed to collect and return this amount to Power Corporation, receiving a 10% incentive. To date, Torrent has not paid this ₹2,200 crore and has effectively pocketed it.
- Notably, the outstanding electricity revenue in Purvanchal Electricity Distribution Corporation is ₹40,962 crore and in Dakshinanchal Electricity Distribution Corporation ₹24,947 crore.
If these two corporations are unfortunately handed over to private firms, these companies will collect approximately ₹66,000 crore, which the Power Corporation will never recover. It is said that private companies are eyeing this ₹66,000 crore revenue.
- Under the Government of India’s RDSS scheme, ₹45,000 crore is being spent in Uttar Pradesh to strengthen and upgrade electricity distribution, with good results emerging.
It seems there is a deliberate conspiracy to hand over the improved distribution system, built at such huge public expense, to private corporations. There is no wisdom in spending such a large public fund only to hand it over to the private sector.
- In 2016-17, AT&C (Aggregate Technical & Commercial) losses were 41%. After 2017, electricity workers worked tirelessly to improve the system. In the financial year 2023-24, AT&C losses reduced to 16.5%. After the RDSS scheme, line losses will fall below 15%. After this, there is no justification for privatizing Uttar Pradesh’s electricity distribution corporations.
- Media reports reveal that under the PPP model, private companies will be given all the land of the distribution corporations in all districts on a token lease of just ₹1 per year. It should be noted that land transfers within the public sector are also done on token leases of ₹1 per year. Giving private companies land worth crores on such a nominal lease is not fair in any way.
- Newspaper reports also indicate that the reserve price for the electricity distribution corporations has been set between ₹1200 to ₹1600 crore rupees, implying that after this reserve price is fixed in the bidding process, all assets of these corporations will be handed over to private entities for a maximum of approximately ₹1600 crore rupees.
- Section 131 of the Electricity Act 2003 states that before transferring the assets of a government company to any individual or private company, it is mandatory to assess the company’s revenue potential and the fair value of its assets. The sale should not be made to a private company for less than this valuation.
- It is noteworthy that there has been no valuation of the electricity assets worth crores of rupees belonging to Purvanchal and Dakshinanchal Electricity Distribution Corporations. The question arises that fixing a reserve price of ₹1500-1600 crores without any asset valuation constitutes a massive scam.
- The revenue potential of Purvanchal and Dakshinanchal Electricity Distribution Corporations exceeds ₹50,000 crore. Despite this, there is a conspiracy to sell these corporations for a pittance.
- The clause regarding conflict of interest in the appointment of transaction consultants for the privatization of Purvanchal and Dakshinanchal Electricity Distribution Corporations has been removed. This is a blatant violation of the CVC guidelines. The illegal appointment of M/s Grant Thornton as the transaction consultant is a glaring example of corruption in the privatization process.
- The team of the illegally appointed consultant M/s Grant Thornton is colluding with the top management and the finance director of the Power Corporation. Based on the consultant’s report, the Power Corporation has sent the RFP documents for privatization to the Uttar Pradesh State Electricity Regulatory Commission. It has come to light that the Regulatory Commission has already sent its recommendations/comments on this report back to the Power Corporation. The Power Corporation has shown AT&C losses of 40% to 42% for Purvanchal and Dakshinanchal Electricity Distribution Corporations. However, the Energy Minister of Uttar Pradesh, Mr. Arvind Kumar Sharma, tweeted that by the end of 2023-24, AT&C losses had decreased to 16.5%. Therefore, showing 40% to 42% AT&C losses in the privatization documents strongly indicates large-scale corruption.
- It is important to note that the 42 districts under Purvanchal and Dakshinanchal Electricity Distribution Corporations are home to some of the poorest populations in the state. After privatization, purchasing electricity at ₹12 to ₹13 per unit will be impossible for these impoverished people. Clearly, the privatization of these corporations is pushing the state back into the dark ages.
- As far as farmers are concerned, they have opposed electricity privatization from the beginning in every state. At the national level, farmers’ main demand letter prioritizes the rollback of the Electricity Amendment Bill and opposition to the privatization of electricity. All farmer organizations will strongly oppose the ongoing electricity privatization in Uttar Pradesh.
- From the perspective of privatization, low-salaried contract/temporary employees are being removed from service. Despite an agreement reached with the Energy Minister after the symbolic strike in March 2023, hundreds of contract workers who were removed have not yet been reinstated. Under the guise of downsizing, 40% of contract employees are being removed, and contract workers over 55 years of age are also being dismissed. All this is being done for the sake of private entities.
- The Bijli Mahapanchayat of Vidyut Karmachari Sanyukta Sangharsh Samiti (UP), State Electricity Council Junior Engineers Organization (UP), Sanyukta Kisan Morcha, and consumer forums propose the following:-
- The decision to privatize Purvanchal and Dakshinanchal Electricity Distribution Corporations should be withdrawn in the broader public interest, keeping in mind the interests of farmers, electricity consumers, and electricity employees.
- From a national security standpoint, electricity must remain in the public sector. Post-privatization, the entry of multinational private companies could affect the security of the country’s electricity grid. The success of Operation Sindoor in May 2025 was due not only to the valor and skill of the Indian Army but also because electricity in Jammu and Kashmir remained under government control with no disruptions. Even amid drone bombings, government electricity workers in border areas maintained uninterrupted power supply.
- Orders for the large-scale removal of contract employees for privatization purposes should be revoked. All contract employees removed during the symbolic strike in March 2023 should be immediately reinstated in accordance with the Energy Minister’s announcement and agreement dated March 19, 2023. All punitive actions against electricity workers must be withdrawn to implement the Energy Minister’s 19 March announcement and agreement.
- The Bijli Mahapanchayat of Vidyut Karmachari Sanyukta Sangharsh Samiti (UP), State Electricity Council Junior Engineers Organization (UP), Sanyukta Kisan Morcha, and consumer forums resolve that:-
- Farmers, consumers, labour unions, teachers’ unions will fully support the ongoing movement by electricity employees, contract workers, junior engineers, and engineers opposing the privatization of Purvanchal and Dakshinanchal Electricity Distribution Corporations. All farmer and consumer organizations will actively participate in the electricity employees’ movement.
- On 2 July 2025, widespread protests will be held in all districts and projects across the country against the ongoing electricity privatization in UP; along with electricity employees, all farmer and consumer organizations will participate in these protests.
- A nationwide one-day strike will take place on 9 July 2025 opposing the privatization of electricity in Uttar Pradesh, which will receive full support from all farmer and consumer organizations. Extensive protests will be organized in all districts of UP to support this strike.
- Upon the issuance of tenders for the privatization of Purvanchal and Dakshinanchal Electricity Distribution Corporations, a one-day symbolic strike of 27 lakh electricity employees will be held nationwide. All farmer and consumer organizations will join in protests supporting this strike.
- Immediately after the privatization tenders are issued, electricity employees, contract workers, junior engineers, and engineers in Uttar Pradesh will commence an indefinite work boycott and mass jail-ins, which will be strongly supported by farmer and consumer organizations. Together with electricity workers, they will launch a massive public movement on the streets.
- It is also resolved that if any employee, contract worker, junior engineer, or engineer faces any punitive action due to these peaceful awareness programs, then all electricity workers of all energy corporations will be compelled to take direct action immediately, for which the management will bear full responsibility. All organizations will actively support electricity workers against any such oppression.
Vidyut Karmachari Sanyukta Sangharsh Samiti, UP
State Electricity Council Junior Engineers Organization, UP
Sanyukta Kisan Morcha
UP State Electricity Consumers Council
All labour unions / teachers’ organizations / social organizations
Copies to:
- Honorable Chief Minister, UP Government, Lucknow
- Honorable Energy Minister, UP Government, Lucknow
- Chief Secretary, UP Government, Lucknow
- Additional Chief Secretary (Energy), UP Government, Lucknow
- Chairman, UPPCL / UPRVUNL / UPPTCL, Lucknow
- Labor Commissioner, Labor Department, Kanpur
- Deputy Labor Commissioner, Labor Department, Lucknow Region, Lucknow