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Union Cabinet Okays SPV Formation for Privatisation of Power Distribution in Dadra Nagar Haveli

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A bird flies next to electricity pylons in the old quarters of Delhi. (REUTERS/Adnan Abidi)

The said privatisation process will fulfil the desired outcomes of better services to over 1.45 lakh consumers.

  • PTI
  • Last Updated:November 24, 2021, 20:05 IST
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New Delhi: The Union government on Wednesday approved the formation of a Special Purpose Vehicle (SPV) to privatise the electricity distribution business in the Union Territory of Dadra and Nagar Haveli and Daman and Diu. A meeting of the Union Cabinet also approved the sale of equity shares of the newly formed special purpose vehicle or the company to the highest bidder and formation of trust(s) for serving employees’ liabilities.

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the formation of a company (Special Purpose Vehicle) to privatise the electricity distribution business in the Union Territory of Dadra and Nagar Haveli and Daman and Diu, an official statement said. The said privatisation process will fulfil the desired outcomes of better services to over 1.45 lakh consumers of the Union Territory 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 unrealised dues, it said. In May 2020, the Government of India 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 Union Territories through privatisation of the power distribution utilities, for leveraging private sector efficiency in electricity distribution. 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.

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, the statement said.

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