Former MP counters argument made by Puducherry governement in court for power privatisation

The economist-turned-former parliamentarian, M. Ramadass, said the government’s argument that the privatisation of the department was due to its cumulative losses, was not justifiable; he said the department was now transforming into a profit-making institution

Former Puducherry Member of Parliament M. Ramadass has countered the arguments made by the territorial administration in the affidavit filed in the Madras High Court for its decision to privatise the Puducherry Electricity Department (PED).

The economist-turned-former parliamentarian, in a statement, said the argument that the privatisation of the department was due to its cumulative losses, was not justifiable.

The government has concealed many facts by giving a figure of ₹780 crore as the cumulative loss of the Electricity Department, he alleged. “The figure is distorted and it gives a grave picture of the department before the public, justifying privatisation. First, it is a cumulative loss and not the current loss accumulated over decades which could be tackled by various well known methods of financial restructuring. Privatisation is not the first resort. Secondly, the cumulative loss is the excess of cumulative expenditure over the cumulative revenue which includes arrears of electricity revenue due to the department,” he contended.

As on March 31, 2022, the outstanding arrears of the department amounted to ₹486. 43 crore (private consumers ₹191.95 crore; government departments, undertakings and local bodies, ₹294.48 crore). Considering this revenue which is due to the government, the actual cumulative loss would be only around ₹293 crore. It is a mystery as to why the revenue of ₹ 486 crore which was due for the government was not deducted from the cumulative loss, he said.

The department was in the process of transforming into a profit-making institution in the recent years through modernisation and improving efficiency. For instance, during the three year period from 2017-18 to 2019-20, the department has earned a profit of ₹49. 18 crore and was likely to improve the position taking into account the changing supply demand scenario.

The Union Government had recommended privatisation in public utilities where the Aggregate Technical and Commercial loss exceeded 15%. The percentage of loss of Puducherry for the fiscal 2021-22 was only 11.50% which is less than the prescribed 15%. Also, the UT is not a producer or generator of electricity and hence the question of very high operational and financial inefficiencies in generation and consequent losses do not arise at all, he said.

At present, the satisfaction of consumers was fairly high in the UT. The per capita consumption of electricity was now as high as 2031 KWH, one of the highest in India and the cost per unit is perhaps the lowest in the country, he said.