Bombay High Court Stays DISCOM Privatization Auction Won by Torrent Power

The Bombay High Court has suspended the auction for a 51% equity stake in the power distribution company (DISCOM) for the Union Territory of Dadra and Nagar Haveli and Daman and Diu.

The High Court suspended the auction after a public interest litigation was filed against the privatization of the DISCOM.

Last month, Torrent Power had emerged as the highest bidder for acquiring a 51% stake in the DISCOM in Dadra and Nagar Haveli and Daman and Diu.

The acquisition process was part of the government’s initiative to privatize DISCOMs to make them more efficient. In December last year, Dadra and Nagar Haveli and Daman and Diu had invited bids to acquire a 51% stake in its DISCOM, responsible for the distribution and retail supply of electricity.

Torrent Power currently distributes 16.66 billion units to over 3.65 million customers in the cities of Ahmedabad, Gandhinagar, Surat, Dahej SEZ, and Dholera SIR in Gujarat; Bhiwandi, Shil, Mumbra, and Kalwa in Maharashtra and Agra in Uttar Pradesh.

With the addition of Dadra and Nagar Haveli (including Silvasa) and Daman and Diu, Torrent would have distributed 25 billion units to over 3.8 million customers and catered to a peak demand of over 5000 MW.

DISCOM privatization initiative has drawn huge opposition from the DISCOMs.

Recently, the Supreme Court of India vacated a stay order given by the High Court of Punjab and Haryana on the privatization of Chandigarh’s DISCOM. The High Court had given the stay order after a petition was filed by the UT Powermen Union of Chandigarh.

In May 2020, the central government came up with a proposal to privatize DISCOMs in the union territories. DISCOMs in the union territories come under the administration of the central government while the respective state governments govern those in the states. Only two of the six union territories have called for bids to privatize the DISCOMs so far.