07-Feb-2012

New Delhi Power Privatisation And How It Has Worked Out


Nigeria is reportedly so impressed with India's - and more specifically, Delhi's - model of privatisation of power distribution that it wants to adopt the Delhi model while selling off its own state-owned power generation and distribution businesses. 
... One wonders whether the Nigerian authorities have had a chance to actually interact with the beneficiaries of power reforms - Delhi's electricity consumers - before coming to the conclusion that the Delhi model was the best one to follow. 
...One also wonders whether Nigerian Regulatory Commission and the Bureau of Public Enterprises of Nigeria, the two government bodies which will be involved with the African nation's power privatisation process, have had a chance to go through the latest report of the Comptroller and Auditor General of India (CAG), which has lambasted the Delhi government for rising power shortages and a mounting power deficit, subsequent to privatisation. 
There have been many demands raised by consumer groups, the latest by the Residents Welfare Associations (RWAs) of the capital, for an independent and neutral audit of the accounts of the power distribution companies. The apex association of RWAs has even moved a division bench of the Delhi High Court seeking a court order for an outside audit.
The reason for this level of outrage and disbelief of claims by the government and the distribution companies are not far to seek.
Far from seeing a palpable improvement in service quality and delivery and a reduction in costs - the main promises made while justifying the power business - they have seen a sharp increase in power tariffs, falling service quality and growing outages and shortages. In other words, privatisation - as far as consumers are concerned - have made things worse, not better.
...In Mumbai, for instance, the stateowned - BEST is actually owned by the Brihan Mumbai Municipal Corporation - sells power at a lower cost to its consumers than its privately owned rival, has a comparable or better record across most service delivery parameters, and manages to meet the government's 'social obligation' of providing power to economically weaker sections of society

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