Uttar Pradesh
Uttar Pradesh Explores Privatisation of Loss-Making Discoms
- 14 Jan 2025
- 2 min read
Why in News?
The Uttar Pradesh government has initiated steps toward privatizing or forming Public-Private Partnerships (PPP) for two of its loss-making electricity distribution companies (discoms).
- This move has sparked protests from employees concerned about job security and the potential impacts on service delivery.
Key Points
- The state’s power corporation recently floated a tender inviting consultants and transaction advisers to devise a privatization or PPP model for Dakshinanchal Vidyut Vitran Nigam Ltd (DVVNL) and Purvanchal Vidyut Vitran Nigam Ltd (PVVNL).
- Both discoms have been grappling with substantial financial losses, prompting the government to explore alternatives to improve efficiency and service quality.
- The government has clarified that the specifics of the partnership, including the shareholding structure, will be determined based on recommendations from consultants.
- These experts will analyse the current state of the discoms and propose a suitable model for privatisation or PPP.
- The model is expected to allow private entities to bring in operational expertise and investment while maintaining some level of government oversight to ensure public accountability.
What is DISCOM?
- About:
- DISCOM stands for Distribution Company in the power sector. It refers to entities responsible for the distribution of electricity to consumers, including households, businesses, and industries.
- Role of DISCOMs:
- Electricity Distribution: They manage the infrastructure and operations for delivering electricity to consumers within their designated areas.
- Billing and Revenue Collection: DISCOMs handle metering, billing, and collecting payments for electricity consumption.
- Maintenance and Upgrades: They are responsible for maintaining the distribution network, including transformers, substations, and power lines.
- Customer Service: DISCOMs address issues like power outages, meter installations, and grievances related to electricity supply.
