Thursday, December 19, 2013

Who is Scared of the AAP? - The Pelican Brief in India

Recently Arvind Kejriwal was reported to have said "Do not pay electricity bills". That is, this is what the headlines said. What Kejriwal actually said was, "We would do an audit of the power companies. It will take a few months. In that time, people who want to pay their bills can pay. But others have the right not to pay until this audit is done".
What is this audit he is talking about? To find out the details, follow me below:
Delhi has privatized electrical distribution companies (discoms). These have been given licenses, by the Delhi Electric Power Regulatory Commission (DERC) based on the Delhi Electricity Reform Act 2000. Currently BSES, which is a Reliance subsidiary and NDPL, which is a Tata subsidiary hold these licenses. So, they supply electricity in Delhi, not the government.
Now, Sheila Dikshit claimed in August that Delhi residents pay the lowest among metros. She "fudged" the truth here - Delhi power tariff IS actually high - but the government has tried to "subsidise" this cost for low unit users. But note where this "subsidy" goes - the government still has to pay the raised cost from taxpayer money to the private discoms. In other words, Delhi power situation is a corporate windfall for Reliance and Tata.
Per se this may be fine - but AAP (and the BJP) believe that the power companies are gouging the customers. There have been steep hikes in the past two years, with the companies wanting more January 2014. 
Now here comes the crux - AAP wants a public audit of these companies, and has suggested that with this audit's results they can cut down the cost of power.
The corporations do not want that audit. Please read BSES FAQ on this issue (item 8 below).
So the power companies are claiming that they CANNOT be audited. 
And they are wrong. They are hoping you won't notice, but the license agreement they signed AUTHORISES the government to audit them using an independent auditor any time the government wants. Here is the license agreement for BSES (clause 7, page 20):

What is amazing to me is the audaciousness with which a company that handles public resources, can claim that they cannot be audited! As an example, this is similar to telcos that handle 2G, 3G spectrum claiming they cannot be audited!
In other words, the AAP is actually asking for something that the government has the right to ask. And the companies (Reliance, Tata subsidiaries) do not want that. They have millions to lose if the AAP implements the audit.
So, suddenly you have scary screaming headlines and PR campaigns on social media smearing the AAP.

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