The global consultancy firm engaged in preparing the privatisation blueprint for power distribution companies in Uttar Pradesh has found itself at the centre of a fresh controversy. Action taken against the firm by a power utility in Madhya Pradesh has triggered sharp reactions in the State, with consumer groups questioning the credibility of the ongoing privatisation process.
Bank Guarantee Forfeited in MP
Documents that have recently come into the public domain indicate that a power utility in Madhya Pradesh cancelled a tender awarded to the firm and forfeited its bank guarantee along with the security deposit. The action, reportedly taken in September 2025, has now become the basis for renewed criticism in Uttar Pradesh, where the same firm is advising on a major restructuring exercise in the power sector.
UPPCL Privatisation Mandate Questioned
In Uttar Pradesh, the Uttar Pradesh Power Corporation Limited (UPPCL) has assigned Grant Thornton the task of preparing the privatisation proposal for the Purvanchal and Dakshinanchal power distribution companies. The consultancy mandate includes valuation of assets, preparation of financial models, assessment of liabilities and designing a transaction framework to attract potential investors.
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Consumers Council Demands Review
The controversy intensified after the State Electricity Consumers Council placed documents related to the Madhya Pradesh tender cancellation in the public domain during a hearing in Ayodhya. According to the council, the bank guarantee was forfeited on grounds of alleged violation of tender conditions and failure to meet contractual obligations. The council argued that such action in another State raises legitimate concerns about the firm’s performance standards and compliance record.
Ayodhya Hearing Raises Questions
Council president Awadhesh Verma alleged that the consultancy has faced controversies in the past as well, including a reported financial penalty in the United States. He claimed that earlier, when questions were raised, the Power Corporation had clarified that the penalty pertained to proceedings outside India and had no bearing on its domestic assignments. However, he said the latest development in Madhya Pradesh warranted a fresh and independent review.
The issue surfaced prominently during a public hearing related to electricity tariffs of the state transmission corporation. Senior officials of the Energy Department attended the proceedings, along with State Electricity Regulatory Commission Chairperson Arvind Kumar and member Sanjay Singh. While the matter was discussed at length, no detailed official statement was issued clarifying the State’s position on the developments in Madhya Pradesh.
Call for Privatisation Halt
The Consumers Council has demanded that the privatisation process in Uttar Pradesh be put on hold until a comprehensive review is conducted. It has also called for the immediate withdrawal of the consultancy contract awarded to Grant Thornton, arguing that public interest must take precedence in a sector as sensitive as power distribution.
According to the council, if financial or contractual lapses have been formally recorded by another State utility, it is imperative for Uttar Pradesh authorities to examine the matter thoroughly before proceeding further. The council has sought a high-level inquiry into the selection and appointment of the consultant to ensure that due diligence, technical evaluation and financial scrutiny were properly carried out.
Political Sensitivity Heightened
Energy sector observers point out that privatisation of power distribution companies is a politically and administratively sensitive exercise. Any perception of irregularity or lack of transparency can erode public confidence and complicate policy implementation. Experts stress that credibility of consultants and strict adherence to contractual norms are critical for attracting credible investors and ensuring a smooth transition.
So far, officials have maintained silence on whether the developments in Madhya Pradesh will have any bearing on the ongoing exercise in Uttar Pradesh. However, the controversy is expected to gather momentum as opposition voices and consumer groups continue to raise questions.
The Consumers Council has warned that if its concerns are not addressed satisfactorily, it will approach the court. With the privatisation proposal at a crucial stage, the coming days are likely to see heightened scrutiny of both the consultant’s track record and the State government’s decision-making process in steering one of its most significant power sector reforms.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
