The Telegraph
Saturday , July 5 , 2014
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Review fiat on power deals
- Minister looks askance at CESC, Tata

Ranchi, July 4: State energy minister Rajendra Prasad Singh today directed his department and Jharkhand Urja Vikas Nigam Limited (JUVNL) in “the larger interest of the state” to review December 2012 agreements of handing over power distribution jobs in Ranchi and Jamshedpur to private firms CESC and Tata Power.

On December 5, 2012, the then Arjun Munda-led state government, in which JMM played the supporting cast, had inked two deals with CESC and Tata Power, which paved the way to allow the private biggies to handle power distribution in the two biggest cities of Ranchi and Jamshedpur, respectively.

Now, Singh, widely held as No. 2 in the Hemant Soren-led state government, is having second thoughts.

“Numerous anomalies have been brought to my notice in the agreements, which relate to financial implications. The agreements, if implemented in their original forms, would cause great loss to the state exchequer. Hence, I have ordered the energy department and JUVNL to review them in the larger interest of the state,” the energy minister told The Telegraph.

“A final decision will be taken when the agreements are reviewed,” Singh said.

The deals, hailed as customer-friendly moves, involved distribution of power to existing and future consumers, minimising transmission and distribution losses, meter reading, billing and its collection, maintenance of overhead transmission lines and transformers and other power equipment.

However, since December 2012, political instability put the twin power agreements in cold storage.

Then chief minister Arjun Munda of the BJP was forced to resign on January 8, 2013, when JMM, in one stroke, withdrew coalition support.

On January 17, 2013, then UPA government at the Centre, recommended President’s Rule in Jharkhand.

After a period of waiting and hectic political lobbying, on July 13, Hemant Soren, who was one of Munda’s two deputy chief ministers, was sworn in as the state’s ninth chief minister and headed the JMM-Congress-RJD combine.

CESC and Tata Power kept waiting for some headway.

Sweeping changes took place in the state’s power sector, at least on paper, as Jharkhand State Electricity Board (JSEB) was unbundled into JUVNL and subsidiaries.

But, for CESC and Tata Power, these changes meant little.

Further problems erupted when Coordination Committee of Power Unions, a conglomerate of six power unions, alleged the agreements would cause losses to the tune of hundreds of crores to the state exchequer.

Now, energy minister Singh’s “review” statement has caused widespread jolts.

Though the minister, contacted by The Telegraph, maintained he just asked for a review, unconfirmed reports indicated this was a fig leaf of a cover and that he had ordered fresh tenders be floated to solicit bids for the prestigious jobs.

When contacted, CESC spokesperson Sanjib Sengupta warned they would not take this lying down.

“Over the past 18 months we are waiting for successive state governments to act but without results. There are rumours that the December 2012 agreements may well be scrapped. Pushed to the wall, we will have no option but to take legal recourse,” Sengupta said, adding they had invested Rs 50 crore already in and around the capital.

Contacted, Vivek Singla, who is the CEO, Tata Power Distribution Franchisee, was more cautious about the fate of distributing power in Jamshedpur.

“We have not received anything in writing from the state so far, so it is unfair to respond right now. We will be in a position to react with clarity only after receiving a written communication from the state government”.

Curiously, amid the controversy, JUVNL boss S.N. Verma claimed to know nothing. “I have not got any directive, either from the minister or the energy department,” he said.