In an interim relief given to the Calcutta Electric Supply Corporation (CESC) and Tata Power limited, the Jharkhand High Court on Tuesday observed that the directions passed by the State Government on scrapping the distribution franchise agreement inked with the State in December 2012 for power distribution in Ranchi and Jamshedpur circles, is not binding on the Jharkhand Urja Vikas Nigam limited (JUVNl).
"An interim order has been passed by the court where it has said that the orders passed by the State Government will not be binding on the JUVNl," said advocate Anand Singh.
The two private companies had moved the Jharkhand High Court fearing the agreement signed between them and JUVNl could be terminated in the light of the statement given by Power Minister Rajendra Singh that he wanted to "review" the deal in the "larger interest of the State". Singh wanted to have an audit conducted by a competent Government agency to find out if the franchisee agreement is profitable for the board and the Government.
"The proposal to hand over the franchise to the power distribution companies was finally cancelled by the Hemant Soren Government later on July 4 this year," said Singh.
CESC bagged power distribution rights for Ranchi while Tata Power got the franchise for Jamshedpur through an open tender process during the tenure of former Chief Minister Arjun Munda in 2012.
The agreement signed between Jharkhand State Electricity Board (JSEB) and the two private power majors had been put on hold by the State Government after being opposed by several unions of employees, workers and even engineers of the JSEB to the appointment of franchisee demanding to publicise the terms of the agreement.
They also alleged that the distribution of franchise would lead to heavy losses amounting over Rs 26,000 crore annually for the board as the Government will buy power at a higher rate and give it to the distribution franchisee at subsidised rate.