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Explained: The Chandigarh electricity outage, and power department protests

Chandigarh power outage explained: Why is the power department protesting? Will there be a hike in power tariff?

During the protest by electricity employees on Tuesday. (Express Photo: Kamleshwar Singh)

Exams were affected, classes shut, industry came to screeching halt, and hospitals pushed surgeries for the next day – it was a Black Tuesday for Chandigarh as the city went powerless. Residents and businesses were caught in the crossfire of the city’s power department protesting against the privatisation of power and the administration struggling to find hands to manage the crisis.

The Indian Express looks at what led to the powermen protest and what might happen once the private company, Eminent Electrical Distribution, fills the department’s shoes.

Chandigarh power outage: Why is the power department protesting?

Chandigarh powermen vehemently opposed the privatization of power in Chandigarh. They claim that not only will this shift of hands cause employees to lose their jobs, but it would lead to a change in department’s service conditions along with higher power tariffs offered to city residents. While the administration has assured that no employee would lose their job and that all will be included in the transfer scheme, the powermen remain sceptical.

“A transfer scheme which places existing government employees under the service of a private party is a clear case of coercion to accept inferior service conditions. Under the proposed transfer scheme of the Chandigarh administration, all existing employees would be transferred to a private company, which is an inferior service condition as compared to government service. This violates Section 133 of the Electricity Act 2003,” VK Gupta, President of the All India Power Engineers Federation said.

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The National Coordination Committee of Electricity Employees and Engineers (NCCOEEE) has also been opposing the centre’s move to privatise the complete power distribution across India. They said that 11 non-BJP states and two union territories had opposed the draft electricity (amendment) bill.

Even as the three-day strike call was announced by the powermen well in advance, the talks with the Chandigarh administration failed when the UT Advisor held a meeting Monday to convince them not to hold the strike.

Chandigarh power outage: It was arguable the longest power cut in its history. (Express Photo: Kamleshwar Singh)

Will we notice a hike in power tariff?

The Chandigarh administration has assured that there will be no change made to the tariff and the department’s privatisation would only lead to improvement in quality of service. But the power sector employees say otherwise.

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VK Gupta, President of the All India Power Engineers Federation, claimed that the privatisation exposes the consumer to market risks that would cause steep and uncontrolled tariff hikes.

“Most business and ease of livelihood rely upon affordable electricity tariffs for their existence. The guarantee of low tariffs is available to consumers of Chandigarh, but with private sector power, the utility benefit of low tariffs cannot be ensured. There is no safeguard provided to protect the consumer from profiteering and inflated tariffs by private parties as these are outside the purview of CAG Audit,” Gupta contended.

Chandigarh power cut: Powermen vehemently opposed the privatization of power in Chandigarh. (Express Photo: Kamleshwar Singh)

Was the power department facing losses?

Chandigarh does not generate its power, but buys it. Even as UT claims that the power department was in losses, the power men have a different tale to tell.

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“The annual turnover of the department is more than Rs 1,000 crore and the market value of its total assets is Rs 20,000–25,000 crore. This department is being sold for a mere price of Rs 871 crore even though it has earned profits of more than Rs 1,000 crore in the last 5 years alone. Therefore, there is no justification for privatising the electricity department,” Gupta said.

They stated that the privatisation of union territories “is just a preamble of government policy to privatise the state electricity boards”.

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First published on: 23-02-2022 at 04:14:30 am
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