Stay on notice to reliance energy arms in Orissa

NEW DELHI: Privatisation of power distribution in Orissa takes centrestage yet again. This time, the Electricity Appellate Tribunal has stepped in to stay Orissa Electricity Regulatory Commission’s showcause orders for suspending licences of the three Reliance Energy-owned discoms.

However, the issue of management of the discoms still remains. The tribunal has appointed a commission to take over the day to day running of the discoms. The tribunal will hear appeals on August 18.

The tribunal has appointed two special officers to oversee the day-to-day operations of the three companies—NESCO, SOUTHCO, WESCO. Reliance Energy holds 51% of the equity shares of these companies. Former member of the Central Electricity Authority, VD Lulla and K Rangantham, former CMD Northern Power Distribution Company of Andhra Pradesh will have managerial, executive and administrative powers. They will submit a report in three months time.

The tribunal’s order followed a petition filed by the three discoms on a show cause notice issued by the Orissa Electricity Regulatory Commission, seeking to know why its distribution licences should not be revoked for violating licensing conditions and other agreements with the state government.

For Reliance, the tribunal’s interim order provides a breather. Sources said that the interim order could prove to be the turning point for privatisation of distribution. “If the special officers do manage to turn the discoms around, it could encourage private players to enter the distribution segment. It would only mean that the discoms weren’t managed very well, with good management private sector participation in distribution can be viable.”

Under the order, the special officers will have the authority to appoint, remove, dismiss, suspend all employees including senior managers of the discoms. A 5-member advisory committee will be set up for each one of the discom comprising the special officers, a representative of Gridco, REL and consumers.

Gridco will relax the Escrow for salaries and statutory dues for employees. After payment towards bulk supply, 10% of the balance will be released for the purpose of maintenance at the written request of the special officers. For the time being, the three Discoms will be considered as one unit for obligation of payment to Gridco.