The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the formation of a company special purpose vehicle (SPV) to privatise the electricity distribution business in the Union Territories of Dadra & Nagar Haveli and Daman & Diu, sale of equity shares of the newly formed company to the highest bidder and formation of Trust(s) for serving employees’ liabilities.
The said privatisation process will fulfill the desired outcome of better services to over 1.45 lakh consumers of Dadra & Nagar Haveli and Daman & Diu, 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.
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 the Union Territories through privatisation of the power distribution utilities, for leveraging private sector efficiency in electricity distribution.
A single distribution company i.e. Dadra & Nagar Haveli and Daman & Diu Power Distribution Corporation would be incorporated as a wholly-owned government Company and Trust(s) will be formed to manage the terminal benefits of the personnel transferred to the newly-formed company.
The 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 (Reorganisation and Reforms) Transfer Scheme, 2020.