Controversy Deepens Against Privatisation Proposal Consultant; Bank Guarantee Seized in Madhya Pradesh

The consulting firm Grant Thornton, tasked with preparing the privatisation proposal for Uttar Pradesh’s electricity distribution companies (DISCOMs), is facing scrutiny following the seizure of its bank guarantee by the Madhya Pradesh Electricity Corporation (MPEC). The move has sparked political and administrative debate, with the State Electricity Consumers Council calling for a high-level investigation.

Grant Thornton had been engaged to provide technical and financial analysis, along with policy recommendations, for the privatisation of Purvanchal Electricity Distribution Corporation Limited and Dakshinanchal Electricity Distribution Corporation Limited. Concerns regarding the firm’s previous performance and regulatory history have now come under renewed focus.

Bank Guarantee Seized

According to the Consumers Council, the MPEC cancelled Grant Thornton’s contract and confiscated its bank guarantee and security deposit in September 2025. These details have recently been made public, although MPEC has yet to issue an official statement explaining the decision.

Council President Avadhesh Verma highlighted that Grant Thornton had previously faced international penalties, including a fine of around USD 40,000 in the United States. While Uttar Pradesh officials had earlier stated that foreign regulatory actions were not applicable domestically, the recent disclosure has reignited questions about the firm’s suitability for handling sensitive government projects.

Calls for Investigation

The State Electricity Consumers Council has demanded an immediate suspension of the privatisation initiative in Uttar Pradesh, arguing that a company with a history of legal or regulatory issues should not oversee critical public infrastructure projects. The council also raised concerns about the transparency of the tender selection process.

In addition, the council has urged a thorough review of the officials involved in drafting the privatisation proposal to identify any potential administrative or financial irregularities. Energy sector experts emphasized that prior to any privatisation, a comprehensive assessment of the consultant’s track record, financial compliance, and legal history is essential.

Public Hearing and Sector Implications

The controversy was also highlighted during a public hearing in Ayodhya on electricity tariff determination conducted by the Power Transmission Corporation. State energy officials and members of the State Electricity Regulatory Commission (SERC) discussed the implications for consumers and tariff-setting processes.

Analysts underline that transparency and reliability are particularly critical in sensitive sectors such as electricity distribution, where privatisation decisions can have broad financial and social impact.

As of now, no formal response has been issued by the energy department or related government agencies. The Consumers Council has warned that it may approach the courts if decisive action is not taken.