Power sector in Tamil Nadu is being privatised. The workers’ unions fought against ‘reforms’ for long, but this time the government is hell bent.
The Tamil Nadu government has announced the substantial involvement of private players to meet the energy needs of the state.
Deputy Chief Minister MK Stalin asserted that the state would bring in an investment of Rs 91,000 crore to generate an additional 18,140 MW of electricity over the next three to five years.
The state is currently facing shortage of power. The installed capacity of projects under the state and central governments and the private sector is over 10,000 MW. Despite purchasing approximately 1,500 MW from the neighbouring states and Independent Power Projects (IPPs), the supply deficit stands at nearly 2,000 MW.
Officials claim that promoting public-private-partnership (PPP) in power sector, especially power generation, will lead to abundant supply of electricity in the state.
“Right now we do not have partnership with any private player. But we are looking forward to it. It will solve the power deficit we are facing,” said Sukumar Solomon, Director (Project), Tamil Nadu Generation and Distribution Corporation Ltd.
But the workers’ unions in the Tamil Nadu Electricity Board are opposing privatisation.
“We have had experience of the American company Enron in Dabhol project in Maharashtra. The company looted the entire money from the Maharashtra State Electricity Board. We do not want similar experience,” contended SS Subramanian, General Secretary – Electricity, Centre of Indian Trade Unions (CITU).
Enron International was managing the Dabhol power project in Maharashtra. Once the company’s financial irregularities surfaced, the project was stalled, leading to a power crisis in Maharashtra.
Subramanian added that the current situation had arisen due to the government’s own policies.
“An addition of 5,000 MW of electricity per year is needed to keep up with the increasing demand for electricity. But for the past 10 years the government has not done anything to increase generation. So, the deficit has gone up,” he said.
The government spends Rs. 3 per unit in power generation. The cost of buying from IPPs and other states can go up to Rs. 19 per unit. In a PP model, the burden falls on the consumer. Cities like Delhi and Bangalore have seen rise in tariffs after partial privatisation of power generation and distribution.
The current emphasis on privatisation is a part of the larger issue of electricity reforms under the Electricity Act, 2003.
The TNEB was recently bifurcated into Tamil Nadu Generation and Distribution Corporation Ltd (TANGEDCO) and Tamil Nadu Transmission Corporation (TANTRANSCO). Though the government claims that the reforms are aimed at protecting rights of the consumers, experts believe that it is a move to promote privatisation in the power sector.
