Privatization of electricity distribution in Dadra & Nagar Haveli and Daman & Diu is approved by the Cabinet
The official statement says the privatisation process will deliver better services to consumers, operational improvements, and functional efficiencies in electricity distribution.
Earlier on Wednesday, the Union Cabinet chaired by Prime Minister Narendra Modi has approved the establishment of a special purpose vehicle (SPV) to privatize electricity distribution businesses in Dadra & Nagar Haveli and Daman & Diu.
The Union Cabinet thereby approved the sale of equity shares of the newly formed company and the establishment of trust(s) to handle the employee’s liabilities.
An official statement said that the Cabinet has approved the formation of a special purpose vehicle (SPV) to privatize the electricity distribution business in DNH&DD, sale of equity shares of the newly formed company to the highest bidder, and establishment of trusts to address employees’ liabilities.
The statement further states that the privatisation process will deliver better services to over 1.45 lakh DNH&DD consumers, will lead to operational improvements, and functional efficiencies in distribution and will provide a model for other utilities across India to follow.
As a result, the electricity industry will be strengthened, competition will increase and unrealized dues will be recovered.
In May 2020, the government of India announced the Atma Nirbhar Bharat Abhiyan, a program aimed at making India self-reliant through structural reforms. The key measure planned was to reform the power distribution and retail supply in UTs through the privatization of the power distribution utilities in order to leverage the private sector’s efficiency in electricity supply.
DNH-DD Power Distribution Corporation Ltd will be incorporated as a wholly-owned government company, where trusts will be formed to manage the terminal benefits of personnel transferred to the newly formed company.
In accordance with the Dadra and Nagar Haveli and Daman and Diu Electricity (Reorganization and Reforms) Transfer Scheme, 2020, assets, liabilities and personnel will be transferred to the newly formed company.
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