Electricity in private hands

ST Correspondent
Wednesday, 5 December 2018

State govt to hand over power distribution and tariff collection to private firms

MUMBAI: Suffering high losses and low recovery, the State government is set to hand over electricity distribution and tariff collection to private players in particular areas. 

In the first phase, the bill distribution in Nashik district’s Malegaon and Thane district’s Kalwa-Mumbra-Diva-Shil Phata areas will be handed over to private companies. The process of tender and selection of companies will be completed in three months. 

“Earlier, it was implemented in Thane district’s Bhiwandi area, where the losses were 60 per cent. After introducing private partner in distribution and collection, the losses reduced to 20 per cent,” said Maharashtra State Electricity Board Holding Company Limited Nominee Director Vishwas Pathak. The contract in Bhiwandi went to Torrent Power. 

The same experiment was implemented in Nagpur, Aurangabad and Jalgaon. Apart from Nagpur, where SNDL is operating the power distribution franchisee, other two experiments have failed. According to the State government, both Malegaon and Kalwa-Mumbra-Diva-Shil Phata are registering losses of 56 per cent. 

As per the arrangement, the company will be responsible for collection of tariff from the region as well as transmission.

“It will ensure that the State government gets its returns after investing it to improve the transmission system. It is a win-win situation for all as the company will also get profit,” said an official from the Power Department. 

The contract period will be of 15 years, as the company is going to invest in terms of system upgradation.

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