Four power distribution companies to be privatized by odisha government.

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Four power distribution companies to be privatized by odisha government.

At the first such move in almost two years in India’s power sector, the Odisha government is defined to privatize four state-owned power distribution companies, said two people conscious of the growth.

The drive is led by Odisha Electricity Regulatory Commission (OERC). Odisha has an average energy demand of 4,000 megawatts (MW).

While WESCO supplies electricity to consumers in the distribution circles of Rourkela, Burla, Balgarh, Bolangir and Bhawanipatna, SOUTCO supplies consumers from the supply circles of Behrampur, Aska, Bhanjanagar, Jeypore and Rayagada. Power is supplied by NESCO to the districts of Balasore, Mayurbhanj, Keonjhar, Jajpur, and Bhadrak. The possible sales are the trade since the 2003 privatization of power distribution in Delhi. In a related development, Tata Power Co. Ltd. has emerged as the sole contender to obtain Central Electricity Supply Utility of Odisha (CESU Odisha). PricewaterhouseCoopers is managing the sale of CESU.

This comes in the backdrop of the National Democratic Alliance (NDA) government’s ambitious target of earning $1.05 trillion from asset sales in the current fiscal year. “We are bound by confidentiality obligations and cannot comment on client-specific matters,” a Deloitte spokesperson said in an emailed response.

Queries emailed to Crisil on Monday evening stayed unanswered. A Price water house Coopers spokesperson in an emailed answer stated,”Due to client confidentiality issues, we might not be able to provide any comment in particular.”

Power supply companies have thus far become the weakest link in the electricity value chain. Poor payment documents of state-owned discoms haven’t only adversely affected power generation businesses, but also have contributed to the strain from the banking sector. The delays in payment by state-run power supply companies range from two months to 15 months.

On the other hand, the energy distribution sector has also started witnessing big trades. “Tata Power was the only technically qualified bidder for CESU. The financial bids have started. The Odisha government’s acceptance is currently awaited to take it ahead,” stated one of the two people cited above.

Feedback Energy Distribution Co. Ltd (FEDCO) and India Power Corp.. Ltd had placed a joint venture for CESU, Mint reported on 11 October last year. “We’ve submitted the bids for CESU PPP job. The price bids are opened. The evaluation process is on. We are yet to hear from OERC (that had completed the bidding procedure ) on the outcome of the bids,” a Tata Power spokesperson said in an emailed answer.

Only one bidder had turned up in a previous effort to privatize CESU Odisha, forcing the conclusion of this process. The OERC revoked the license in 2005.

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