Discoms need not go private now, Karnataka government tells Centre

Karnataka maintains that its discoms are in good fiscal shape and do not require privatisation

The state government has rejected the Centre’s proposal to privatise power distribution companies (discoms) in Karnataka, stating that it was not necessary right now.

Under the proposal, power supply to various parts of the states by three of the five discoms under Karnataka Power Transmission Corporation Ltd would have been privatised.

The move was floated by the Ministry of Power last year which suggested several franchisee models to be adopted by states while offering the escoms for privatisation.

As part of the reforms announced to boost the Covid-19-hit economy, the Centre had sent a proposal to the state government on September 20, with draft standard bidding documents for privatising power supply of Bengaluru Electricity Supply Company, Chamundeshwari Electricity Supply Company and Gulbarga Electricity Supply Company. The three were among the 34 discoms identified by the Centre in September after discoms of Union Territories were privatised earlier in May.

While October 5 was the last date for submitting responses to the Centre’s proposal, sources said Karnataka sought an additional week to submit its reply. Karnataka maintained that its discoms were in good fiscal shape and did not require privatisation. The government, however, left its options open saying it would reconsider the proposal based on whether the model succeeded in Union Territories.

“We have sent a detailed response to the Centre saying that it was not required immediately,” Mahendra Jain, Additional Chief Secretary, Energy Department, told DH.