Tata Power, India Power Corporation submit bids for three discoms in Odisha

Industry sources said Tata Power has submitted bids for all three discoms, while IPCL has submitted bids for SOUTHCO and WESCO
Odisha, which has offered three of its power distribution companies (discoms) for privatisation, has received bids from Tata Power and India Power Corporation.

The bids were called earlier this year for Western, Southern and Northern Electricity Supply Companies, or WESCO, SOUTHCO, and NESCO.

Industry sources said Tata Power had submitted bids for all three discoms while IPCL for SOUTHCO and WESCO. This effectively makes Tata Power the only bidder for NESCO.

The Odisha Electricity Regulatory Commission (OERC), which conducted the bidding, could not be reached. 

This is Odisha’s second attempt at privatising its power distribution. The three discoms were earlier with Reliance Infrastructure’s BSES in 1999. After a decade of legal disputes and non-performance, the OERC revoked the distribution licence of the Anil Ambani company in 2015.

The state thereafter offered some cities under the franchisee model to private companies. Feedback Energy Distribution Company (FEDCO) Infra is the distribution franchisee in four circles – the Puri, Balugaon, Khurda, and Nayagarh areas.

Under a franchisee model, ownership remains with the state. The franchisees earn revenue through billing. Their profit depends on revenue collection.

Tata Power recently won the power distribution licence for four circles under the Central Electricity Supply Utility (CESU) in Odisha. The licence pertained to the circles of Bhubaneswar, Cuttack, Paradeep, and Dhenkanal in the CESU area.

Under privatisation, the ownership of the discoms vests with the private player. The company manages power purchase, builds infrastructure, manages billing and collection, and adheres to targets on bringing down losses.

Delhi and Mumbai have discoms run privately. However, the terms of the distribution licence in these cities differ from those in Odisha.

In its annual report, Tata Power said it would not pursue any greenfield or brownfield expansion in thermal power. It would explore options in the power distribution business in Indian and international markets and acquire transmission assets, this paper reported recently.

The company further said it would focus on augmenting transmission infrastructure in Mumbai. It will also look for opportunities in acquiring transmission assets through mergers and acquisitions. In its distribution business, Tata Power will explore services business opportunities in both domestic and international markets.

The Union power ministry, in its amendment to the Electricity Act, 2003, has suggested privatising discoms to cut losses. The Act has provisions for distribution franchisees. Since the power ministry’s proposal, only Uttar Pradesh has shown an interest in privatising, which it is doing in the case of one of its discoms. Additionally, the finance ministry, in its “Aatm Nirbhar Bharat” package of reforms, announced privatising discoms in all Union Territories.

 



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