The project was announced with much hype last year and was supposed to be implemented by March 2013. It entailed privatizing power distribution by giving out franchises in two circles - Gurgaon and Panipat - to begin with.
The Union power ministry, in the minutes of meeting held in October last year, had claimed that the participation of the private power sector in the management of distribution of electricity has been encouraging.
The input-based franchisee model of Bhiwandi in Maharashtra has been successful. Franchises have been appointed in Kanpur and Agra in Uttar Pradesh, Nagpur and Aurangabad in Maharashtra. But franchisee system in Nagpur was an utter failure. Franchisees are collecting money and not remitting back to the state power utilities. But ironically, The Maharashtra State Electricity Distribution Company Limited (MSEDCL) is also in the process of appointing franchisees in Jalgaon, Shil-Mumbra-Kalwa, Malegaon and Manmad.
"There was strong resentment among the rank and file of the two Haryana power utilities (HPUs) and both the workers' unions were against the system. We even gave the workers' unions an option to take control of the distribution networks. But they did not relent on their stand on stalling privatization even when they could not run the system themselves. Hence, the project had to be postponed," said Haryana power minister Ajay Singh.
Gurgaon contributes monthly revenue of Rs 232 crore against DHBVN's total monthly revenue collection of Rs 500 crore, while Panipat contributes Rs 52 crore a month out of monthly revenue of UHBVN of Rs 350 crore. The two unions have over 20,000 workers on their rolls. The government first shelved the Gurgaon project, followed by the one in Panipat.