Tata Power backs off from distribution biz in Karnataka amid backlash

Bengaluru: Tata Power has withdrawn its application seeking to enter the electricity distribution business in half of Karnataka after its moves triggered a backlash from the unions and the local Congress regime.

The Mumbai-based Tata Group company has filed a memo saying it was no longer keen to pursue its application for distribution licenses, top sources in the Karnataka Electricity Regulatory Commission (KERC) told ET.

The company has not cited any reason for withdrawing its request. The power sector regulator would treat the application as closed, the sources added.


The development followed a decision in the Cabinet, chaired by Chief Minister DK Shivakumar on July 2 to not let the company enter Karnataka. The government directed all electricity supply companies (Escoms) to file objections before the regulator opposing its entry into the distribution business. KERC, sources said, also received many objections from other stakeholders including unions seeking to block Tata’s entry.

Tata Power, which already handles distribution in Mumbai, Delhi, Odisha and Rajasthan, has applied for five licenses in Karnataka.

Each license covers a minimum of three districts. The company, which plans to handle power distribution in 20 districts of Karnataka, however, had not included Bengaluru, the state's largest load centre. Elsewhere, the company has been managing distributions either through subsidiaries or through public private partnership (PPP) basis.

Shivakumar, addressing the power sector employees after receiving felicitation from their associations on June 29, said he was disappointed that the employee unions did not protest enough or raise their voice when the NDA regime introduced the law in 2003.