Odisha govt to privatize CESU!

Odisha Sun Times Bureau
Bhubaneswar, Apr 24:

A little over a year after the Odisha Electricity Regulatory Commission (OERC) revoked the distribution licence of the three Reliance Infrastructure (R-Infra)-managed distribution companies (discoms)  -for their miserable performance in key areas such as controlling technical and commercial loss, billing, payment of arrears to Gridco and servicing NTPC bond, the Odisha government is mulling to privatise another discom Central Electricity Supply Utility of Odisha (CESU).


If sources are to be believed the state government has planned to sell CESU to a private company through the bidding route.

For the purpose PricewaterhouseCoopers (PWC) has been hired as the consultant against a fee of Rs 1.02 crore.

To expedite the bidding process, a six-member committee with the Energy secretary as its head has been constituted. Though the  committee has already held four meetings, it is yet to arrive at a firm decision.

Sources say that the bidding process may reach a decisive stage next month.

Such move of the state government and the OERC has been severely criticized by various organizations and experts. Experts are of the opinion that CESU’s losses are mainly due to faulty management.

Currently, the situation is at its worst–it is making a loss of Rs 20 crore a month. Total losses now have touched Rs 2,200 crore.  Arrears payable by consumers’ stands at around Rs 1543 crore out of which recovery of Rs 660 crore is very bleak. In most of the cases, CESU has disconnected their supplies. Rs 122 crore is locked in disputes between CESU and consumers. The utility has to alone make a payment of Rs 1337 crore to Gridco as arrears towards the purchase of power, sources revealed.

Confusion prevails on whether the private bidder will opt to take it with its losses or only opt for its assets.

Notably, CESU which has been under the management of OERC has failed to control Aggregate Technical and Commercial (AT&C) Losses like other discoms.

The question remains under such circumstances how its privatization is going to result in profit.

On the other hand, Odisha Consumers’ Federation has strongly reacted to the state government’s move to privatize CESU.

“Currently, the power sector in the state is going through the worst crisis. The four discoms owe the government a whopping Rs 7239 crore as arrears. In the meantime, all the companies incorporated by the government have turned out to be inactive. OERC is even aware that these discoms have failed to utilize funds available under capital expenditures (CAPEX),” said Ramesh Chandra Satpathy, president Odisha Consumers’ Federation.

“After so much of bitter of experiences, the government and OERC should desist from such a move. Political parties should in a united manner resist such move. The government should stop from going for privatization and takeover these companies like in neighbouring  states,” he added.


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