Privatisation of discoms attractive but only franchise model restrictive, says Tata Power

As the beleaguered power sector expects reforms from the government, Ramesh Subramanyam, CFO, Tata Power, in an interview with CNBC-TV18 on Monday, said that privatisation of distribution companies (discoms) will be attractive for the industry but just implementing franchise model is restrictive and will not solve the problem.

Talking about the impact of separation of carriage and content in the power sector, he said, “In theory and more or less in practice, it is a perfect thing. I think it will take some time before we see the results... states have to get used to this completely new concept and it is going to be another big change management."

“For any private player, who is interested in distribution, if full-fledged privatisation is not there then the next best option is a franchise. From a management perspective and from an interest perspective, privatisation is clearly preferred because you have the whole ecosystem in control. Therefore you can make large scale changes,” he added.