A & N Administration Advances Toward Complete Privatisation of Electricity Distribution & Retail Supply in Andaman and Nicobar Islands

Tarun Karthick

Sri Vijaya Puram, 28 October 2024

The Electricity Department of the Andaman and Nicobar Islands has initiated the bidding process for the complete privatisation of electricity distribution and retail supply within the union territory. This significant move potentially aims to enhance efficiency and reliability in power services, addressing longstanding issues faced by residents.

On 24 October 2024, the department published the invitation for bids on the Andaman and Nicobar Islands E-Procurement Portal, seeking a buyer for 100% of the shares in the electricity company that is responsible for distribution and retail supply of electricity and holds the distribution license in the Union Territory of Andaman and Nicobar islands. The bid submission period begins on 13 December and concludes on 19 December 2024, with the bids scheduled to be opened on 27 December 2024.

The cost for the Request for Proposal (RFP) document has been set at ₹5,90,000 (Rupees Five Lakhs Ninety Thousand Only). Entities that pay this fee will gain access to the RFP Document containing comprehensive information regarding the bidding process and related details.

Currently, there is no additional information available online about the bidding process on the Electricity Department’s website or the official portal of the Andaman and Nicobar Administration. Furthermore, the bid security amount has been established at ₹23,00,00,000 (Rupees Twenty-Three Crore Only).

The electricity supply situation in the Andaman and Nicobar Islands, particularly in Sri Vijay Puram and South Andaman, has been precarious, with residents frequently facing power outages and unreliable service. The privatisation initiative could potentially offer much-needed relief to consumers by improving service delivery.

This move aligns with the Government of India’s ‘Atmanirbhar Bharat Abhiyan,’ announced in May 2020, which aims to make India self-reliant through structural reforms. A key component of this initiative is the reform of power distribution and retail supply in Union Territories (UTs) through privatisation, leveraging private sector efficiency to enhance electricity distribution.

The invitation for bids represents a critical step toward the privatisation of power distribution in the Andaman and Nicobar Islands, following the Government’s vision for transformative reforms in the energy sector. However, many sections of society may have their own reservations regarding the privatisation of the Electricity Supply and Distribution in Andaman and Nicobar Islands.