NTPC drops plan to bid for BSES discoms, cites lack of transparent process

Topics NTPC | BSES

It is, however, looking to take part in the discoms bidding in two Union territories — Puducherry and Chandigarh
State-owned NTPC, India’s largest power generator, has dropped its plan to buy out Reliance Infrastructure stake in two power distribution licence areas in Delhi.

 
The power retailing rights are currently controlled by joint ventures of Reliance Infrastructure and the state government.

 
NTPC had in May showed interest in the stake sale but has now cited “lack of transparent process” for not taking part in the bidding. It is, however, looking to take part in the discoms bidding in two Union territories — Puducherry and Chandigarh.

Company sources said NTPC dropped the plan because the bidding was not being conducted by the Delhi Electricity Regulatory Commission (DERC).

 
BSES is a public utility and thereby we expected the bidding to be held by DERC. As that is not happening, we are no longer evaluating it in our business plans,” said a company executive. Industry sources, however, said the sale process was now on hold.

 
In May, NTPC had written to DERC expressing its interest in the sale of majority stake in Reliance Infrastructure-promoted two power distribution companies (discoms) in Delhi — BSES Yamuna Power and BSES Rajdhani Power. NTPC mentioned in its letter that it was keen on BSES discoms, provided “the equity sale is done through a transparent process”.

 
Executives said the sale process of BSES discoms should follow the same model as Odisha where the state’s electricity regulator — Odisha Electricity Regulatory Commission — is bidding out rights to distribute electricity. Odisha recently offered three of its discoms — Northco, Southco, and Wesco — for sale. Tata Power and India Power placed bids for these discoms.

Tata Power in December last year won the licence for retailing electricity in Bhubaneswar, Cuttack, Paradeep, and Dhenkanal in Odisha.

 
According to reports, DERC has refused to oversee the sale process of BSES discoms. DERC could not be reached for an official comment.

 
Reliance Infrastructure owns 51 per cent each in both the power distribution companies. The rest is owned by the New Delhi government through Delhi Power Company.

 
Discoms in Delhi were privatised in 2002 when two went to Reliance Infra and one to Tata Power. In central Delhi area of the city, New Delhi Municipal Corporation runs the power distribution.

 
In June, Reliance Infra removed consultancy firm KPMG from the sale process of the BSES discoms, and has not appointed any new consultant since. In 2017, Reliance Infra sold its power distribution business of Mumbai to Adani Electricity, a wholly-owned subsidiary of Adani Transmission.


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel