The Bankruptcy of Power Sector Reforms

The CAG Draft Report on Delhi’s Distcoms describing the Rs. 8,000 crore loot of consumers, follows on the heels of the Orissa Electricity Regulatory Commission’s (OERC) order, cancelling the licenses of the three Anil Ambani Reliance distribution companies. OERC cancelled Reliance licenses in March, 2015 for failing to deliver on any count, and repeatedly violating its orders. With this, we have come a full circle on the electricity reforms introduced by the Electricity Act 2003, whose primary goal was to privatise the sector. The two examples of privatising distribution have now both failed – Orissa and Delhi. All that remains is formal winding up these private distribution companies and handing them back to public hands, as Orissa has already done.

The World Bank had started the campaign for privatising electricity generation and distribution in the 90’s, as a part of its larger agenda of privatisation of public infrastructure. The “star” example that the World Bank gave, was that of Margaret Thatcher, in UK, who wanted to break the unions and privatise all public services such as telecom, electricity and railways. What the World Bank did not talk about publicly, was that Maggi Thatcher’s “reforms” were not the first electricity “reforms”. That “distinction” belongs to the infamous Pinochet regime, which carried out these reforms after Pinochet’s bloody coup in Chile, completely privatising the electricity sector.

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