Sucheta Dalal :PSU blues
Sucheta Dalal

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PSU blues  

May 31, 2004



The Bharatiya Janata Party (BJP) led government has been knocked out of office and its PSU disinvestment programme has been jettisoned by the United Progressive Alliance government; but many hapless retail investors who bought PSU shares, (especially the controversial ONGC offer) in March, are still waiting for the allotment mess to be sorted out and have their money refunded. Readers would recall that MCS Limited, ONGC’s Registrar and Transfer agent, had goofed up and credited a large number of investor accounts with shares, far in excess of their allotment. As always, the market regulator ordered an immediate inquiry, but it has led nowhere, nor helped investors who didn’t receive shares or a refund.

One investor, Dr.Punwani, had to send a legal notice to MCS before to get a reply. Others continue to write angry letters to ONGC’s chairman, SEBI, MCS and investment bankers whose names figure in the offer document. Since PSU share prices have now dropped way below their original offer, not getting a refund is only adding insult to investor’s injury. Will Finance Minister P.Chidambaram ask the regulator to crack the whip and to quickly clean up the PSU share mess that has been inherited by his government?

New Energy

Power company shares have dipped sharply after United Progressive Alliance’s common minimum programme decided to take another look at the Electricity Act, but some consumers have heaved a sigh of relief after encountering the new face of private distribution. In Mumbai, subscribers are confused and wary about the change in billing cycles, tariff slabs and additional deposits collected by Reliance Energy (formerly BSES), but this is still the nicer face of private power companies. Jagdeep Desai an architect and activist says that Reliance Energy has been sending tough talking officials to recover the electricity bill from his mother, a brain tumour patient and senior citizen through intimidation and threat. Mrs Desai has a billing dispute with Reliance Energy after her electricity meters failed.

The meters were replaced at Mr.Desai’s own request, but he alleges that the company has slapped his mother with an unusually high bill that is not comparable with the average consumption before or after the meter was replaced.

While the matter remains under dispute, the consumer has been making part-payments of her bill and Jadgeep Desai has had several meetings with company officials to resolve the issue. Reliance Energy too has admitted to some discrepancies and a delay in updating its computers for billing, but its officials insist that these matters are inconsequential.

Although there is a genuine dispute, the company has begun to send its representatives to the residence of an ailing Mrs.Desai threatening to disconnect power. Is this the new face of privatisation that domestic consumers will face, while the farmer vote bank gets free electricity?

Dabhol’s friends

When it comes to netas and babus, there is no saying when and how they will return to positions of power and influence. When Phase-I of Enron’s controversial Dabhol Power Company (DPC) project was scrapped in Maharashtra, Ajit Nimbalkar was chairman of the Maharashtra State Electricity Board (MSEB) and attracted a big share of flak when the DPC deal was being investigated. He later became chief secretary after the Nationalist Congress Party returned to power through a coalition government. Meanwhile DPC had already been revived, expanded and scrapped again; and, at thrice its original size, it is now a bigger financial problem for the State than ever before. Since Sharad Pawar, who brought Enron into India in the mid 1990s, is now more influential in Delhi, the effort to revive Dabhol have gained momentum. Media reports now say that Ajit Nimbalkar may head the Maharashtra Electricity Regulatory Commission (MERC) as a post retirement sinecure. With such a setting, it is only a matter of time before a revival package for DPC is rammed through.

Staying on  

With just a week to go before his term at IDBI Bank was set to end, M.Damodaran was one of the privileged few that got to meet Finance Minister P.Chidambaram on his first day in office. Damodaran is reported to have an excellent equation with the Prime Minister as well as the finance minister. Dr.Manmohan Singh took him out of the Northeast and brought him to North Block; he then worked with Mr.Chidambaram in the banking division of the finance ministry. By all indications, he will be asked to turn the former institution around and maybe see it through the Enron-Dabhol mess. With less than five days to go before his IDBI tenure ends, this is one time when the bureaucracy will work at double speed to clear the appointment.

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-- Sucheta Dalal