let CAG audit settle the issue of power tariff hike
Much of last week was dominated by the news of impending power tariff hike by the private distribution companies (discoms) owned by the Reliance Infrastructure ltd (RIl) and how the proclaimed benefits of privatisation are a shoddy fiction. Inside and outside the Assembly, political leaders and self-styled guardians of consumers’ interest vented their spleen over the demands of the discoms to be compensated through tariff hike, via the orders of the Appellate Tribunal on Electricity (ATE), to the tune of a whopping Rs 4,200 crore said to be the loss they have suffered in the seven-year period from 2008 to 2014. Assorted tribunes demand that the discoms be audited by the CAG before any tariff hike is considered by the Government. On the face of it, there should not be any objection from the RIl to this demand.
Their own discoms in Delhi as also that of Tata are already being audited by the CAG after they lost their case in the High Court against the decision of Kejriwal’s first Government ordering audit of their accounts by the Central auditing institution. Even though they have filed an appeal in the same court against the order of the single judge, with the Supreme Court permitting a CAG audit of the private telecoms, their case seems to be up against a brick wall. At the moment, however, they are fully cooperating with CAG audit. All information and documents about the whole gamut of their functioning are being furnished to the CAG for scrutiny.
light must be shown on their financial affairs and nothing should be kept hidden from public scrutiny, particularly when they are asked to pay. Discoms auditing their own accounts, arriving at their own loss and then asking the consumers to compensate them for that loss are truly bizarre. In the interest of transparency and fair play, they should be independently audited to arrive at the actual loss. And who better than the CAG, the supreme audit institution of the country, can to do this auditIJ The CAG has distinguished itself by adopting the best accounting principles and practices followed all over the world.
The CAG audit of the Reliance and Tata discoms which had slowed down after Kejriwal’s Government resigned in February last year has now picked up after his spectacular victory last week. On its part, the Delhi Electricity Regulatory Commission has also launched a capex audit of the discoms to verify allegations of ‘gold-plating’ of assets by them.
If the Government’s right to get the accounts of discoms and telecoms audited by the CAG has been judicially validated and they are already being audited by the constitutionally established auditor, why should our Government maintain an inscrutable silence over this demandIJ Good governance requires that Naveen Patnaik’s Government immediately accede to this demand before all sections of the society, united in their revulsion against the discoms’ monstrous demands force its hands over the CAG audit. Rubbing salt into the wound, the Reliance discoms have shown utter callousness in sticking to their promised capex investment plans and reducing the transmission and distribution loss from a staggering 38 to 23 per cent. Till a CAG audit is over, it stands to reason that power tariff rates should remain frozen at the existing level. All it requires is for our Government to locate its spine.
Milking public mood of hostility against tariff hike to demonise privatisation
Finally, our civil society captains, political leaders and media grandees have found a cause to unite them. That cause, ostensibly, is to protect the electricity consumers from what they call the rapacity of profit-fixated and self-enriching power distribution companies bent upon effecting, in collusion with Naveen Patnaik’s Government, a steep increase in tariff rates on an apology of power supplied to us. In sheer diversity of political and personal motives, we got last week a rainbow alliance of speakers to rant against the power racketeers who, in their view, are driven solely by the lodestar of profit and whose operating credo is unalloyed greed.
Axe-grinding politicians, practised rabble rousers, rent-a-mob leftists, TV studio-embedded commentators and a multitude of hobgoblins were all over the subject like flies on excrement. Hurling high-decibel philippics that had the eardrums quivering for mercy, the far left, red in tooth and claw, demanded immediate rollback of privatisation. The pinkos were so sulphurous in their denunciation of privatisation that they dubbed it as no better than lawful theft. Discoms are Dracula-like Cosa Nostra sucking blood from the hapless consumers, they thundered. Public are lumbered with parasitic privateers leeching them off their life, hissed another lefty.
Their trade union comrades, perishing for lack of power to hold the private companies to ransom, exultantly joined the carnival of denunciation with all the fire power they still have. Bring a ‘White Paper’ on the subject was the demand of a media baron who has been prescribing this cure-all for all our problems, not just the power problem. A particular political leader, God knows which party he belongs to, was so exercised over the issue that he led a mob that forcibly entered the OERC office and broke glass panes for better visual effect.
A BJD legislator, known for his dog-like loyalty to the State’s ruling dynasty, broke the sound barrier by warning that a Delhi-like cataclysm may happen here too if the profiteering discoms are not reined in immediately. A young Minister and a self-described thought leader with a doctorate added to his name for good measure joined the mood music of inflammatory opposition by adding whatever fuel he had saved from his earlier days in the power ministry.
However, the almost psychotic hostility displayed against power tariff hike is not altogether misplaced, given the wave of public revulsion currently sweeping the State. Privatisation of power distribution has self-evidently failed to achieve its objective of providing quality power at competitive cost. But, at the same time, we should not be fooled by the gnashing of teeth and demented shrieking of the ideologically motivated and self-serving leaders. Their frothing indignation and anti-privatisation call to arms are their standard stock-in-trade.
Bringing power distribution under public ownership is an idea nobody should touch even with a bargepole. Economic insanity of nationalisation is plain for all to see. Government ownership will turn the power offices into nests of trade union vipers. The solution lies in having privatisation with rigorous regulatory control and audit. But the shiny specimens of regulators we have at present make a mockery of control. The OERC is the gummiest of all regulators. Its pathetic existence resembles a cow suffering from acute gingivitis. Its Chairmen are either retired pensioners or out-of-favour bureaucrats allowed to age gracefully in their last sinecure.
The OERC’s epic incompetence is taken as read. Everyone knows it is of as much use as a chocolate teapot. For years, this supposedly autonomous quangocracy procrastinated over the discoms’ demand for tariff hike as if it was awaiting instructions from its real political masters. They have no manpower, no infrastructure, no skill, no resource and no motivation to exercise effective supervision over the highly resourceful and scheming private companies.
They are lambs trying to regulate the wolves. If in the developed West or even in Mumbai, privatisation of power distribution has been an unqualified success, why can’t we replicate that success hereIJ Compounding the problem is our aggrandizing political class. They are the third person in the marriage between the producer and the consumer.
ODISHA’S CROWN JEWEl CITY CUTTACK IS IN TERMINAl DECAY
While Chief Minister Naveen Patnaik rhapsodises about making all kutcha houses pucca, outbreak of jaundice in Cuttack should shatter his reverie. How does he square his fantasy with the horrific and mind-numbing reality that ‘most of the water pipelines in the city pass through drains’IJ If this is the condition of the beating heart of the Twin City, who can find fault with the observation that Patnaik is a visiting Martian. In the real world, away from the Shangri-la in which he lives, Cuttack-like squalor is in-the-face reality. The near-death state of living conditions in the Millennium City should knock some sense into his obtuse mind. Water pipelines are not in sewer, ideas are.
(saratpattanayak@hotmail.com (M) 9437962121)