Whether government monopolies or private monopolies, they are monopolies: RK Singh


Responding to reporters’ questions about Banerjee’s opposition and her letter to Prime Minister Narendra Modi alleging that states had not been consulted properly, Singh said on Monday: “Why does she want to protect a monopoly, especially a monopoly? expensive like in Calcutta? And added, “She’s just playing politics. She doesn’t understand or she has been misinformed.”

RP-Sanjiv Goenka CESC Ltd group company supplies electricity to Kolkata and recently placed the highest bid of ₹871 crore to acquire the Chandigarh electricity distribution company. CESC was also among the bidders for the electric discoms of Dadar and Nagar Haveli, and Daman and Diu for which Torrent Power made the highest bid.

A spokesperson for the RP-Sanjiv Goenka group did not immediately respond to Mint’s request to comment on Singh’s statements.

Singh said that when the Electricity (Amendment) Bill 2021 was released for all state government comment, the West Bengal government did not send comments. However, at the meeting with state governments, West Bengal was represented.

“I don’t see how anyone can oppose number one, opening up the industry to competition? How and why can someone object, especially when we set a cap rate? So basically there will be a price cap and businesses will have to compete below that price so that the interests of consumers are protected, ”Singh said.

This comes in the context of the Centre’s results-oriented electricity distribution sector program, applicable until 2025-2026, which aims to reduce India’s AT&C loss to 12-15% from 21. , 83% in 2019-20, and to reduce the deficit between the cost of electricity and the price at which it is supplied to “zero” by 2024-25.

“We also anticipate that this will be basically the minimum size of an area and we anticipate that the cross-subsidy will remain and that if someone collects more cross-subsidies in a particular area, it would go to a grant pool. which would be used to cross-subsidize in areas where there are gaps, ”Singh added.

The bill has gone to the cabinet secretariat, which must present it to the cabinet. After cabinet approval, the bill is expected to be introduced in the current monsoon session of parliament.

“The Minister of Finance announced in her budget speech that the people should have a choice and that they should not be subjected to costly monopolies. For example, the private distribution company in Calcutta has one of the highest tariffs in the country and it is not clear why it should be protected from competition, ”Singh said.

Prime Minister Narendra Modi said earlier that an electricity consumer should be able to choose their supplier like any other retail product. With discoms being the weakest link in the electricity value chain, the EU budget presented earlier this year announced the creation of a framework for consumers to choose their electricity suppliers.

“The main feature of this amendment is the delicacy of the distribution. This is something that was announced in the budget speech. What does decommissioning mean? Delicense means that I open the doors to competition. The existing distribution companies will continue to operate as they are, ”Singh said.

“But for the moment, they are monopolies. Whether they are state monopolies or private monopolies, they are monopolies. In Delhi, there is a monopoly. In Kolkata there is a monopoly. Incidentally, Kolkata has one of the highest tariffs in India and it is a monopoly. It’s a private monopoly, ”Singh added.

The amendments also propose to strengthen the electricity regulatory commissions and the Electricity Appeal Tribunal (Aptel). They also set out penalties for non-compliance with renewable energy purchase obligations that require electricity distribution companies (discoms) to purchase a fixed amount of renewable energy to reduce reliance on fossil fuels.

“We are not here to protect the monopolies. We are here to protect the interests of the people. Why should people suffer with dcoms that are inefficient, don’t provide good service, and are expensive? ”Singh said.

This comes in the context of the approval by the Cabinet Committee on Economic Affairs of the marquee ₹$ 3.03 trillion blackout reform program, in which the Centre’s share will be ₹97,631 crores. Funds will be disbursed to discoms subject to meeting reform milestones.

“There is a proposed delicacy of distribution. The existing discotheques will continue as they are, however their monopoly will disappear and they will have to face competition. Right now people have no choice. They have to support a distribution company even if it is inefficient, its service is poor and the price is high. The people must suffer. There has to be competition in this industry so people can choose a distribution company that offers more efficient service at a lower price, ”Singh added.

This comes at a time when India’s demand for electricity is increasing. While India has an installed power generation capacity of 383.373 gigawatts (GW), demand has generally been less than 200 GW. However, that changed on July 7 when India’s peak electricity demand hit a record 200.57 GW on July 7.

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