Jammu and Kashmir heads towards privatising power sector

Starts unbundling PDD under ‘reforms program’

Muddasir Ali
Srinagar, Publish Date: Sep 21 2018 11:14PM | Updated Date: Sep 22 2018 10:17AM
Jammu and Kashmir heads towards privatising power sectorFile Photo

In a first step towards privatisation of power distribution in Jammu and Kashmir, the government is set to “unbundle” the state’s power department under a reforms program proposed six years ago, to bring about “accountability” and “improvement” in the system.

To begin with, the government has decided to make the state’s power trade company (Tradeco) functional. A source told Greater Kashmir that once the Tradeco, which would deal with purchase and selling of energy to consumers, becomes operational, the commercial and survey (C&S) wing of the power development department (PDD) would stop operations. Its powers and human resource would be shifted to the new company under restructuring and unbundling program of the PDD.

The PDD’s administrative head would be the chairman of the new company while its chief engineer would act as its managing director, reads an official order.

“This unbundling is aimed at running the power department purely on commercial lines and fixing the responsibility. It is a step towards smarter and corporate management of the power sector,” said a senior official.

The reforms program proposal aimed to unbundle power generation, transmission and distribution by setting-up independent corporations.

While energy generation is the job of power development corporation (PDC), the power purchases and selling would be looked after by Tradeco and the power transmission shall be handled by the power transmission company (Transco). The final step would be to set-up the distribution company (Discoms), replacing the PDD’s MnRE wing. At present, PDD has at least 10 wings and all of these would be subsumed in these corporations. The move to unbundle PDD is aimed at arresting power losses which are growing with every passing year.

“It is a plan agreed to by every state that unless the sector is commercialized, the power distribution can’t be economically viable for the governments,” said the official. While state’s power purchase bill has swelled to more than Rs 4,500 crore, the returns on account of power tariffs are less than Rs 2,000 crore. The deficit on account of tariffs is eating into the state’s meager resources. With passage of time, these corporations would be required generating their own resources for sustaining manpower. “It is a step towards privatisation of power distribution in the long run,” said another senior official.

He said that the government was “under pressure” from the union power ministry to arrest growing transmission and distribution losses which are more than 50 percent in Jammu and Kashmir—the highest among all states. “The restructuring will allow independent functioning of transmission and distribution businesses and provide operational, managerial and functional autonomy to the utilities to operate on commercial lines,” the official said. The entire process of restructuring would mean relocation of more than 22,000 posts from within the PDD in the new utilities.

The unbundling program has however met with stiff opposition from the power department employees who have planned a strike at all district headquarters on September 25. “This (unbundling) will not only harm the rights of employees of the department but have a harsh impact on general public as well,” said state president, J&K electric employees union, Mir Abdus Salam Rajpuri. He said after the government failed to implement several reforms programs in time including the R-APDRP, IPDS, PMDP, PMRP and DDUGJY, which could have minimised energy losses, the authorities, in order to cover up their failures, want to unbundle the department In a first step towards privatisation of power distribution in Jammu and Kashmir, the government is set to “unbundle” the state’s power department under a reforms program proposed six years ago, even as officials have started raising concerns over what they called the “anti-people” and “anti-employees” move.

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