AP Govt Moves to Privatise Amaravati Power Distribution

Andhra Pradesh Chief Minister Chandrababu Naidu does not have the same inclination towards public sector organisations as he does towards the private sector. Whenever he is in power, he tends to show greater preference for the private sector. In a nutshell, he does not hesitate to even give the impression that the systems and organisations under his control do not function properly despite him being in power. There are many strong reasons behind his preference for the private sector. Now, preparations have been made to privatise the highly crucial electricity distribution and supply systems starting from Amaravati, which he describes as his dream project. In this regard, the Capital Region Development Authority (CRDA) has issued an Expression of Interest (EOI) notification. According to this, the government will operate the electricity distribution and retail supply system in the capital Amaravati in partnership with a private company. Responsibilities such as development, operation and maintenance of the electricity network in the capital, setting up a smart grid system, consumer services, billing and collection will be handed over to private companies.

It has been stated that domestic and international companies can apply as per the EOI issued by the CRDA. October 12 is the last date for submission of applications, while the bids will be opened on October 13. It is being said that this decision has been taken to develop an advanced and uninterrupted electricity supply system with state-of-the-art facilities in the capital. However, sources in the Energy Department said that the entire process is moving forward according to an agenda. Official sources say that there are chances that the project will be awarded to a company belonging to an industrialist who is highly favoured by both the Centre and the state government. A senior official revealed that arrangements have already been made behind the scenes in this regard and that the tender notification is merely a formality. Governments have been trying for a long time to privatise the electricity distribution system. Fearing opposition from the public, they have been postponing it all these years. At one point, the World Bank used to impose such conditions while providing loans worth thousands of crores of rupees. Now, the Modi government at the Centre is also imposing conditions that several reforms should be implemented in the power sector if loans are to be obtained at lower interest rates.

There are widespread allegations that the thinking behind this is to benefit certain private companies. Whatever the reasons may be, the Andhra Pradesh government has now made all arrangements to hand over the responsibility for electricity distribution and supply to private companies starting from the capital Amaravati. If this happens, private companies are likely to impose heavy charges for every service provided to consumers. It is being said that every transaction, including obtaining a new connection, will become more expensive than it is now. Apart from this, there are also concerns that if electricity supply and distribution go into private hands, the system could operate according to their wishes. Official sources say that there is a possibility of starting this first in the capital Amaravati and then gradually expanding this model across the state. If this happens, that is, if the electricity distribution and supply systems are privatised, it is certain to place an additional burden on the people, a senior IAS officer said.