The All India Power Engineers Federation (AIPEF), led by Chairman Shailendra Dubey, has strongly opposed the proposed joint venture arrangement for the Ladakh Power Development Department (LPDD), describing it as a step toward the privatization of a strategically critical public utility.

AIPEF expressed serious concern that the proposed model prioritizes commercial interests over public welfare, national security, and the long-term sustainability of Ladakh’s power sector.

According to the federation, the joint venture model is likely to result in higher electricity tariffs due to provisions such as Return on Equity (RoE) and the commercialization of operations. This, it warned, would disproportionately impact poor and low-income households in Ladakh, where affordability is already a major concern.

The current welfare-oriented functioning of LPDD, AIPEF said, would be replaced by a profit-driven model, undermining the principle of universal and equitable access to electricity. While the continuation of subsidies has been mentioned, it remains uncertain and dependent on future budgetary support, thereby exposing consumers to policy risks.

The federation also cautioned that mechanisms such as incentives for arrear recovery could lead to aggressive disconnections, adversely affecting economically weaker sections. Additionally, the proposed 25-year license period would lock consumers into a system with limited safeguards against tariff shocks.

Highlighting the region’s strategic importance, AIPEF noted that Ladakh’s location along sensitive borders with China and Pakistan makes its power infrastructure a matter of national security.

It warned that transferring control of critical electricity infrastructure to a joint venture entity, including provisions for third-party engagement, could dilute direct government oversight and create potential security vulnerabilities, including cyber threats.

“In times of conflict or national emergency, reliance on a commercial entity could compromise responsiveness and alignment with national priorities,” the federation stated. It also expressed concern that the fragmentation of command structures through the separation of operational functions could weaken coordinated decision-making in such a sensitive region.

AIPEF further argued that despite being labeled a joint venture, the structure effectively transfers control to a corporate entity, amounting to “privatization in disguise.”

It alleged that public assets built through government investment are being transferred without adequate safeguards, while liabilities such as employee benefits remain with the government—creating an imbalanced arrangement where profits are privatized and risks are socialized.

The move, it added, could also reduce transparency and democratic accountability, as public grievances would shift from a government department to a corporate framework.

On employment concerns, AIPEF said that while existing employees may receive temporary protection, future recruitment is likely to be on contractual terms, weakening job security and institutional strength. Over time, this could erode technical expertise within the public sector.

The federation also questioned the suitability of private operators, stating that they may lack the local knowledge and sensitivity required to function effectively in Ladakh’s unique and harsh conditions, potentially affecting service quality.

AIPEF argued that the proposed model does not address the sector’s financial challenges, as it continues to rely on government support in the form of revenue gap funding while adding the burden of profit margins. It warned that tariff-linked incentives could encourage cost escalation rather than efficiency, and that long-term contractual commitments would limit future policy flexibility.

Instead of privatization, AIPEF urged the government to strengthen the public utility model through capacity building, governance reforms, and enhanced central support.

“Given Ladakh’s strategic importance and difficult terrain, the power sector must remain under public control, subsidized, and aligned with national priorities rather than commercial interests,” it said.

The federation emphasized that electricity in Ladakh is not merely an economic commodity but a social lifeline and a strategic necessity.

It cautioned that the proposed joint venture could lead to:
•    Increased tariffs for poor consumers 
•    Loss of sovereign control over critical infrastructure 
•    Heightened national security vulnerabilities 

AIPEF has urged the government to reconsider the proposal in the larger public and national interest and to engage with stakeholders before taking any irreversible decision.