The Odisha Electricity Regulatory Commission (OERC) on Wednesday finally revoked the licences issued to three distribution companies (discoms) Nesco, Wesco and Southco managed by the Reliance Energy ltd (REl) on account of their works being not satisfactory.
Energy Secretary Suresh Chandra Mohapatra told the media that the licences of the three companies working under the REl have been revoked. The Chairman and Managing Director (CMD) of the State-run Grid Corporation of Odisha (Gidco) has been appointed as the Administrator of these three companies with immediate effect. He has already taken over the charge from this morning.
This decision would not affect the Gridco-sanctioned employees of these three discoms. However, the Reliance employees, including CEOs and MDs, would have to go. The Gridco CMD has been specifically asked to ensure that the decision does not affect the consumers, he said.
The discoms had been under the scanner for failing to invest in improving the power distribution and were seeking upward tariff revisions without caring for reduction of aggregate technical & commercial (AT&C) losses.
The OERC had set a target for these companies to reduce the losses and asked them to invest in infrastructure. It had also served a show-cause notice to them in this regard. The companies were, however, unable to meet the performance targets of the OERC.
Notably, the Government had revoked the licences of the three discoms in 2005. However, challenging the decision of the Government, they moved the Central Electricity Regulatory Commission (CERC) and the Supreme Court.
But as performance of the companies never improved, the OERC had lodged a suo motu case against them along with a show-cause notice asking why their licences should not be revoked.
Mohapatra informed that though the discoms had been working since last 15 years, the AT&C loss stood at 40 per cent and they were unable to rein in unlike Delhi and Mumbai where they operate at 15-20-per cent loss. The discoms did not invest a single pie from their own fund to improve the infrastructure which forced the OERC to revoke their licences.