The All-India Power Engineers Federation (AIPEF) has come out in open support of UP power employees who have threatened to go on an indefinite work boycott from May 20 against the state government move to privatise power distribution system in four cities: Varanasi, Kanpur, Ghaziabad and Meerut.
In a representation handed over to chief minister Akhilesh Yadav, the federation has substantiated the apprehensions of power employees, who fear the state utility will lose revenue to the private companies. The federation in a statement said that all four selected cities are high revenue earning areas and revenue realisation per unit of electricity sold in these cities is much higher than average revenue realisation of UPPCL.
For example, the AIPEF said, revenue realisation per unit for 2012-13 (after implementation of revised tariff) is Rs 5.50 in Ghaziabad, Rs 4.60 in Meerut, Rs 4.50 in Kanpur and Rs 3.50 in Varanasi against Rs 3.05 per unit average of UPPCL. "Therefore, it is not clear what is the criteria of privatisation," said AIPEF secretary general Shailendra Dubey. If privatisation is being done in name of losses, then why profit earning areas are being privatised which will cause more losses for UPPCL.
The federation also highlighted how privatisation has dented the foundation of revenue starved UPPCL in the past. It quoted the example of Torrent Power which bagged the contract of power distribution in Agra in April 2010. Vidyut Karmachari Sanyukta Sangharsh Samiti, UP, had opposed it at that time. "Now, three years of franchisee have passed and UPPCL is incurring huge losses due to franchisee," the federation said. The average power purchase cost of UPPCL is Rs 3.95 per unit and UPPCL is giving this electricity to M/s Torrent Power at the rate of Rs 1.86 per unit, thus losing Rs 2.09 per unit. Thus, by supplying approximately 2000 million units to private franchisee, UPPCL is losing more than Rs 425 crore every year. The auditor general's report submitted in June 2012 had also indicated foul play in franchisee appointment and estimated loss of Rs 5,343 crore.
Likewise, the urban distribution of Greater Noida was handed over to a private company, M/s Noida Power Company Ltd (NPCL). According to agreement, M/s NPCL was required to erect 90 MW generation plant in Greater Noida within 54 months to meet out its power requirement, but company has not erected even a single MW plant even after 20 years of agreement. UPPCL is supplying power to M/s NPCL at lower rates than its purchase cost, thus incurring huge losses, the federation said.
Source- Times of India