State govt. urged to reject Tata Power bid for distribution licence

Dharwad district unit of All India Kisan Khet Mazdoor Sangathan (AIKKMS) has urged the State government to reject Tata Power Company Limited’s (TPCL) application for parallel power distribution license in 15 districts.

In a press release issued here, AIKKMS district secretary Sharanu Gonawar said the loss of nearly ₹ 40,000 crore faced by five State-owned electricity supply companies (ESCOM) and the State government’s apparent interest in privatization of power could push the agriculture sector into crisis.

Therefore, the Karnataka State Committee of All India Kisan Khet Mazdoor Sangathan (AIKKMS) requests immediate rejection of the applications filed by Tata Power Company Limited seeking to obtain parallel electricity distribution license in the operational areas of State-owned ESCOMs (BESCOM, MESCOM, HESCOM and CESCOM).

In the statement, AIKKMS said that if electricity distribution is handed over to private companies, social welfare schemes such as Bhagya Jyothi and Kutira Jyothi for poor rural households may be phased out and the poor may be deprived of access to affordable electricity.

The proposed move could result in seven hours of uninterrupted free electricity being cut off in villages as private companies adopt a profit-driven “pay and receive” model.

Moreover, after privatization, priority may increasingly shift to industrial consumers and less attention will be paid to rural areas.

The statement stated that in a situation where farmers are currently in a difficult situation due to the lack of wage support prices and migrate to towns in search of livelihood, it may become impossible for farmers to continue farming if electricity becomes scarce and expensive.

Karnataka already has an extensive electricity distribution infrastructure developed using public funds. Creating another parallel network of substations, transformers and distribution lines in the same areas will lead to unnecessary duplication of assets and waste of resources.

The statement stated that such duplication is economically inefficient and will ultimately impose additional costs on consumers through various fees and regulatory mechanisms.

The statement said AIKKMS would urge the State government to reject TPCL’s application and conduct a comprehensive and independent socio-economic impact assessment on the implications of granting parallel distribution licenses, particularly the cross-subsidy model and financial implications for the State Exchequer, before considering such applications in public hearings.