01-Dec-2009

Delhi power supply (cont'd)

[this was posted to Hasiru Usiru mailing list]
Dear Mr Dinesh Kumar

My compliments to you on an excellent and fairly well researched analysis of the overall power scenario in the country, even if not quite complete. Like I had some time back suggested to HU to nominate Rohan D'Souza to be on the board of the LDA, I would now like to request HU to nominate you to the KERC advisory panel. I believe there's a vacancy there, and if HU members are agreed, I can, in fact, take the initiative in getting other civil society organisations in Bangalore to also pitch in. This is particularly significant in view of the impending privatisation of the Karnataka ESCOMS.

Very clearly, there's hardly any defence of the way the Delhi power distribution privatisation has been taken through. But, that doesn't mean that the idea of privatisation itself is bad. In fact, if I recall correctly, it was Mr Gajendra Haldea himself who was the prime mover of the idea, when he was in the government. And, the PRAYAS report, I had read some 5 years back, had many recommendations for the way Delhi should go, based on the learnings from the mistakes committed in Orissa. Apparently, neither PRAYAS nor Mr Haldea were consulted, but instead TATA Consultancy was engaged, even while one of its sister companies was very much in the picture as one of the major contenders for the job - crony capitalism in full play. The problem lies largely there. And, subsequently, in the powerful players getting a very pliable 'regulatory commission' put in place, quite as much as in California.

49% equity ownership is more than good enough to ensure a say in the goings on, and if the Delhi government has not used its position to prevent the misdeeds cited, it certainly is guilty. I wonder why the civil society, and the opposition parties have not made enough of a noise. Whether with a government service provider or a with a private one, if the people (civil society) are not vigilant, between the mafia's and the lobbies, they will indulge in their loot.

My stance on privatisation comes largely from this clear example - comparison of oranges against oranges, and not against apples, viz Bangalore power distribution vs North Mumbai power distribution. Bangalore has always been with the government servise provider - BESCOM, successor to the earlier KSEB. Mumbai North has from long been with BSES, which was taken over by Reliance, some ten years back. Resulting from it all, Bangalore today is a Rs 1500/- cr market for gensets, inverters, converters, batteries, emergency lamps, candles, etc, whereas these products hardly have a presence in the Mumbai market. There lies the difference. Whereas Mumbai enjoys quality power, we are suffering the incapacities of the government-owned BESCOM.

Admittedly, even South Mumbai is in a similar happy state as North Mumbai, even with the supply there being in the hands of the city-owned BEST. But, BEST is losing money heavily, whereas Reliance is making fair profits, the playing field being uniformly level for both the players, ensured by the MERC. Given the scenario, the Mumbai city administration is now under pressure to hand-over the distribution to another private player.

Another major factor is that the government has an important role to play as the regulator, besides that of the facilitator. If it's to play the role of a player in addition, it can never be effective or impartial in its more important roles.

Yes, BESCOM is doing better now, compared to a few years back. But, I would attribute this largely to one person - Mr K Jairaj, the current Principal Sec, Power, whose stature ensures that even the neta's generally listen to him. But, it's the same Mr Jairaj who is piloting the privatisation efforts in the state in full appreciation of the fact that that's the only sustainable way to ensuring efficiency. And, PRAYAS is very much on the advisory panel in Karnataka. All we need to do is to ensure that they are not side-lined at the last minute, and some interested party brought in.

And, lastly, for now, why don't you want to put these on PRAJA? Please understand that I am not the voice of PRAJA. There are more people who question my views there than here, and in a more studied way like you do. Besides, by putting it on PRAJA, there's perhaps a better chance of your views reaching the likes of Mr Jairaj himself - just my view; I may be wrong.

Muralidhar Rao

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