Cabinet approves privatisation of discoms in Dadra & Nagar Haveli and Daman & Diu

• A single distribution company — DNH-DD Power Distribution Corporation Limited — would be incorporated as a wholly-owned government company
• Trust(s) shall be formed to manage the terminal benefits of the personnel transferred to the newly formed company

New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the formation of a company (special purpose vehicle) to privatise the electricity distribution companies (discoms) in the Union Territory of Dadra & Nagar Haveli and Daman & Diu (DNH&DD), sale of equity shares of the newly formed company to the highest bidder and the formation of Trust(s) for serving employees' liabilities, an official statement said on Wednesday.

A single distribution company — DNH-DD Power Distribution Corporation Limited — would be incorporated as a wholly-owned government company and trust(s) shall be formed to manage the terminal benefits of the personnel transferred to the newly formed company, said the statement. Transfer of assets, liabilities, personnel etc to the newly formed company will be done as per the Dadra and Nagar Haveli and Daman and Diu Electricity (Reorganization and Reforms) Transfer Scheme, 2020.

Privatisation of discoms: Cabinet decision follows SC verdict

The Cabinet decision comes months after the Supreme Court verdict in which it lifted the stay imposed by the Bombay High Court on the discom privatisation process. The tendering process for the sale of 51 percent equity share in the Dadra & Nagar Haveli and Daman and Diu discoms was halted due to the Bombay High Court order. The Bombay HC had suspended the bidding process after a public interest litigation (PIL) was filed against privatisation. Torrent Power had emerged as the highest bidder for the acquisition of 51 percent stake.

'Discom privatisation will improve services to consumers'

"The said privatisation process will fulfill the desired outcomes of better services to over 1.45 lakh consumers of DNH&DD, operational improvements and functional efficiencies in distribution and provide a model for emulation by other utilities across the country. This will further lead to an increase in competition and strengthen the electricity industry and will also lead to recovery of unrealized dues," said the statement.

In May 2020, the government had announced 'Atmanirbhar Bharat Abhiyan' to make India self-reliant through structural reforms. One of the key measures planned was to reform the power distribution and retail supply in UTs through privatisation of discoms, leveraging private sector efficiency in electricity distribution.

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