New Delhi: Delhi’s Lieutenant Governor Najeeb Jung on Monday warned the three private power distribution companies that their licences may be cancelled if they continue to oppose government audits of their accounts.

Arvind Kejriwal, the new chief minister of Delhi, had last Tuesday ordered the audit of accounts of the three companies since they came into existence 11 years ago by the national auditor, the comptroller and auditor-general (CAG).

“A CAG audit of electricity companies in the national capital from the time of privatisation shall be carried out. The government is willing to even consider cancelling the licences of companies that do not cooperate in the conduct of that audit. The government shall not be a silent bystander,” Jung said in his mandatory address to the newly-elected Delhi legislative assembly on Monday.

Traditionally, constitutional heads like the President, Governors or Lieutenant Governors read out speeches prepared by their governments at the beginning of the maiden session of the house or each year on the first day of the budget session.

Reducing power tariffs by half was one of the promises Kejriwal’s Aam Aadmi Party (AAP) had made to Delhi voters. Kejriwal called on the CAG, Shashi Kant Sharma, on Tuesday. The CAG accepted Kejriwal’s request to audit accounts of the three private companies and to deploy a team for the purpose.

The three private distribution companies are owned by top industrial conglomerates in the country. While two of them are owned by the Reliance Group, the other is owned by the Tatas.

The New Delhi Municipal Council distributes electricity in the area under its jurisdiction including the national capital zone popularly called Lutyens Delhi, named after Sir Edwin Lanseer Lutyens who designed New Delhi when the colonial British government decided to shift India’s capital from Calcutta (now Kolkata) to Delhi in the early years of the last century.

AAP had accused the previous Sheila Dikshit government of being in collusion with distribution companies to fleece Delhi residents through inflated bills and fast-running meters.

The three distribution companies refused to cooperate in the audit and had argued that, being private entities, the CAG had no jurisdiction over them.

Their argument weakened on Monday with the Delhi High Court ruling that the CAG can examine accounts of private telecom companies who have a revenue sharing agreement with the government. The court ruling came in the wake of the 2G spectrum allocation scam, which CAG had estimated was worth Rs1.76 trillion (Dh103 billion).

The three distribution companies have a similar revenue sharing agreement with the Delhi government.

They came in place of the government-owned Delhi Electricity Supply Undertaking in 2002 following an agreement with the government.

While distribution became streamlined, Delhi residents have always complained about inflated bills, which became a major issue in the just concluded assembly elections in the city state.

The Kejriwal government had on January 1 announced reductions in tariff by 50 per cent for those who consume a maximum of 400 units per month, beyond which the consumers would have to pay for the entire supply at existing rates.

The relief was for three months since the AAP government is convinced that, after lifting the lid through the CAG audit, Delhi would be able to provide cheaper power without the government giving subsidies to the distribution companies.