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Home News Power Sector News BJP slams govt for Delhi discoms bailout, seeks PM's intervention

BJP slams govt for Delhi discoms bailout, seeks PM's intervention

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BJP slammed Delhi government for offering bailout package to private power distribution companies and sought Prime Minister Manmohan Singh's intervention in ordering a CAG scrutiny into their accounts. The Delhi government on Delhi had decided to infuse fresh equity of Rs 245 crore into Tata Power Delhi Distribution Ltd (TPDDL) to help it tide over financial crisis. Delhi government has 49 per cent share in TPDDL.

"The private power distribution companies have been looting people. The government has been offering bailout packages to these companies succumbing to their black-mailing. We condemn the government decision," senior BJP leader V K Malhotra said.

Over a year ago, Delhi government had offered a similar bailout package to Reliance Infrastructure-backed discom BSES by infusing fresh equity of Rs 500 crore to the company. Reliance had infused Rs 520 crore and the total amount of Rs 1,020 crore was used for getting a loan of Rs 5,000 crore from IDBI bank.

"We request the Prime Minister to immediately order a CAG audit of all the accounts of the distribution companies since start of their operation in Delhi," said Malhotra.

The Delhi Government has also granted a financial assistance of Rs 200 crore to Pragati Power Corporation Ltd and Rs 100 crore to Indraprastha Power Generation Co Ltd as both these state-run power generation companies have been going through severe financial crisis due to non-payment of dues by BSES Yamuna Power Ltd and BSES Rajdhani Power Ltd.

The two discoms together have not paid outstanding dues to the tune of Rs 2,000 crore.

Malhotra also accused the Delhi Government of siding with private discoms and said the Sheila Dikshit-led dispensation has given "freehand" to the companies to "loot the public of Delhi."

Malhotra said though the Delhi Electricity Regulatory Commission in 2010 had decided to cut the tariff by around 25 per cent, the government restrained the regulator from doing so coming under pressure from the discoms.

On May 4, 2010, the Delhi government, using a special power, had stalled DERC's decision to announce the annual tariff for 2010-11 till it re-examined the demands from discoms to increase the rates.

The DERC, which was making last minute preparations to announce the new tariff next day, after receiving the government directive had indicated that it had planned to cut down the tariff by 20 to 25 per cent as discoms would have a surplus of around Rs 4,000 crore if the existing tariff was not changed.

Although DERC was strongly arguing for a cut in tariff, the three-member regulator, following retirement and subsequent appointment of two new members, gave indication of taking a sympathetic approach to the demands of the discoms and hiked the tariff by 22 per cent in August 2011 and 26 per cent in June last year for domestic consumers.

The government's notification stalling the tariff order was quashed by Delhi High Court in February, describing the intervention as "absolutely unjustified, unwarranted, untenable".

Following the Delhi government's intervention, the then DERC headed by Berjinder Singh, who was strongly arguing for cut in power tariff, had sought opinion of the then Solicitor General Gopal Subramanium on the issue who held the government's directive as "ultra vires".


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