The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the formation of a special purpose vehicle to privatize electricity distribution business in the Union Territory of Dadra & Nagar Haveli and Daman & Diu.
Accordingly, the formation of “DNH-DD Power Distribution Corporation Ltd” has been approved. Alongside, the sale of equity shares of the newly-formed company and the formation of a trust, or trusts, for serving employees’ liabilities has also been approved by the Union Cabinet.
This exercise forms part of the government’s plan of May 2020 of privatizing electricity distribution in all the Union territories Chandigarh, Andaman & Nicobar Islands, Dadra & Nagar Haveli and Daman & Diu, Puducherry, Jammu & Kashmir, and Ladakh—in a phased manner. The objective was to leverage private sector expertise and efficiency, in the power distribution space.
In the case of DNH&DD, privatisation will fulfill the desired outcomes of better services to over 1.45 lakh consumers of the UT, operational improvements and functional efficiencies in distribution and provide a model for emulation by other utilities across the country. This will further lead to an increase in competition and strengthen the electricity industry and will also lead to recovery of unrealized dues, a government release said.
Part of Transfer Scheme
A single distribution company “DNH-DD Power Distribution Corporation Ltd” would be incorporated as a wholly-owned government company, and trust(s) shall be formed to manage the terminal benefits of the personnel transferred to the newly formed company. Transfer of assets, liabilities, personnel etc to the newly formed company will be done as per the Dadra & Nagar Haveli and Daman & Diu Electricity (Reorganization and Reforms) Transfer Scheme, 2020.
Also read: Power Distribution Privatization Of DNH & DD: Bombay High Court Suspends Tender
Torrent Power in the waiting
Torrent Power has emerged as the highest bidder for the privatization of power distribution in the UT of DNH&DD. However, the formal award is pending as the matter is subjudice. Here is a gist of the story so far:
- February 2021: Torrent Power announced that it had emerged as the highest bidder for acquiring 51 per cent stake in the power distribution company of the UT of DNH&DD.
- March 4, 2021: In a statement, Torrent Power said that the Bombay High Court has suspended the tender process in the wake of a PIL case filed before the court, until further orders in the matter.
- July, 2021: Torrent Power informed that the Supreme Court of India has, inter alia, granted stay of the operation of the aforesaid impugned interim order of Bombay High Court suspending tender process of the above referred bid, and to list the matter for hearing before the Supreme Court of India.
Featured photograph (source: ddd.gov.in) shows the Nani Daman Jetty in the UT of DNH&DD. In January 2020, the erstwhile UTs of Daman & Diu and Dadra & Nagar Haveli were formally merged into one single entity called Union Territory of Dadra & Nagar Haveli and Daman & Diu (DNH&DD), with Silvassa as its capital.
