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Formation of DNH-DD Power Distribution Corporation approved

India: The Union Cabinet has approved the formation of a special purpose vehicle to privatize electricity distribution business.

The formation of DNH-DD Power Distribution Corporation Ltd has been approved for the privatization of electricity distribution business in the Union Territory of Dadra & Nagar Haveli and Daman & Diu. Accordingly, the formation of “DNH-DD Power Distribution Corporation Ltd” has been approved. Alongside, the sale of equity shares of the newly-formed company and the formation of a trust, or trusts, for serving employees’ liabilities has also been approved by the Union Cabinet headed by Prime Minister Narendra Modi.

This exercise forms part of the government’s plan of May 2020 of privatizing electricity distribution in all the Union territories in a phased manner. The objective was to leverage private sector expertise and efficiency, in the power distribution space.

In the case of DNH & DD, privatisation will fulfil the goals of better services to consumers, operational improvements and functional efficiency 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 unrealized dues, a government release said.

A single distribution company “DNH-DD Power Distribution Corporation Ltd” 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.

 

Source: T&D India