Lok Sabha Question No. 4974 (UNSTARRED), answered on 2021-03-25
Subject: Privatisation of Chandigarh Electricity Department
Ministry: POWER
Asked by: Manish Tewari

## GOVERNMENT OF INDIA MINISTRY OF POWER

## LOK SABHA UNSTARRED QUESTION NO.4974 TO BE ANSWERED ON 25.03.2021

## PRIVATISATION OF CHANDIGARH ELECTRICITY DEPARTMENT

4974.  SHRI MANISH TEWARI:

Will the Minister of POWER be pleased to state:

(a) whether there is any proposal for the  privatization  of  Chandigarh  Electricity Department and if so, the details thereof;

(b) the details of the revenue figures of the Department;

(c) whether the profits  earned  by  the  Department  and  the  Aggregate  Technical and Commercial (ATC) losses were lower than the set target during the last three years and if so, the details thereof;

- (d) the details of transmission and distribution losses of the Department; and
- (e) the reasons to privatise a profit making entity by the Government?

## A N S W E R

THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR POWER, NEW & RENEWABLE ENERGY AND THE MINISTER OF STATE FOR SKILL DEVELOPMENT & ENTREPRENEURSHIP

(SHRI  R.K. SINGH)

(a) : Under  the  Aatma  Nirbhar  Bharat  Abhiyan,  Government  of  India  had taken a policy decision to privatize the Distribution functions in  the  Power Departments/Utilities in the Union Territories. This is an important policy decision of the  Government,  which  has  been  taken  with  the  objective  of  providing  better services to consumers and aimed at further improvement in operational and financial efficiency of Distribution sector. This will also provide a model for emulation by other Utilities across the country.

The privatization of Electricity Department in UT of Chandigarh is under process  where  Request  for  Proposal  (RFP)  for  selection  of  bidders  for  purchase  of 100% shares in Distribution Company has been floated. The selected bidders will be responsible  for  distribution  and  retail  supply  of  electricity.    After  the  privatization process is completed, the Distribution function would be carried out by a company 100% owned by a private entity.

………2.

## (b) : The details of the revenue figures of the Department as provided by the UT Administration, Electricity Department, Chandigarh, are as under:

(Figures in crore)

| Carrying cost                                            | FY 2018-19   | FY 2019-20   | FY 2020-21   |
|----------------------------------------------------------|--------------|--------------|--------------|
| Opening gap/ (surplus)                                   | (165.84)     | (88.87)      | (254.73)     |
| Addl. gap/ (surplus) due to standalone year              | (116.60)     | (155.42)     | (84.22)      |
| Cumulative gap/ surplus for the FY 2010-11 to FY 2013-14 | 208.17       | 0.00         | 0.00         |
| Closing Gap/ (Surplus)                                   | (74.27)      | (239.29)     | (338.84)     |
| Average Gap/ (Surplus)                                   | (120.05)     | (161.58)     | (296.78)     |
| Rate of interest                                         | 8.00%        | 9.55%        | 8.85%        |
| Carrying cost                                            | (9.60)       | (15.43)      | (25.27)      |
| Closing gap/ (Surplus)                                   | (83.87)      | (254.73)     | (365.11)     |

(c) & (d) : The department has gap/surplus as indicated above.

As per information provided by UT Administration, Electricity Department,  Chandigarh,  the  Department's  aggregate  technical  and  commercial (AT&C)  losses  have  not  been  worked  out.  However,  targets  for  Transmission  & Distribution  (T&D)  losses  have  been  set  and  achievements  are  measured.    The details of T&D losses for the last three years are as under:

| Year   | Year    | T&D loss   | T&D loss   |
|--------|---------|------------|------------|
|        |         | Target     | Achieved   |
|        | 2017-18 | 12.75%     | 9.51%      |
|        | 2018-19 | 12.25%     | 13.5%      |
|        | 2019-20 | 9.40%      | 11.91%     |

(e) : This is an important policy decision of the Government of India taken under  the  Aatma  Nirbhar  Bharat  Abhiyan  with  the  objective  of  providing  better services to consumers  and  further improvement  in  operational and  financial efficiency of Distribution sector.

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