The Hindu : Other States / Uttar Pradesh News : U.P. to privatise power distribution

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Monday, Nov 01, 2004

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U.P. to privatise power distribution

LUCKNOW, OCT. 31. With all major private players vying for the 1000 Megawatt Anpara C thermal power plant, the Uttar Pradesh Government is set to float tenders for inviting private companies to hand over the power distribution network in the State.

Tenders for all the five distribution companies of U.P.are expected to be issued tomorrow while the last date for submitting tenders for the Anpara C plant was also fixed for tomorrow.

A senior power department official said that the entire process of handing over the power distribution network to private players would be completed by March 15, 2005, so as to enable them to start their operations from the next financial year.

However, the U.P. Government would have to face a huge task to provide a subsidy generally known as `transit finance' of about Rs 12,000 crore for the next five years to the private companies to fill up the gap from the line losses and other factors.

Under the formula to hand over the distribution network to private companies, the State Government would have to bear the difference between the cost of generating power incurred by the State-owned power utility and the rate at which it is sold to the private operator. At present on an average, generating cost per unit of power in U.P. was around Rs 3 while as per the new arrangement the Government will have to charge only Rs 1.30 per unit from the private operators. Sources said that the Government's tender inviting request for qualification for five distribution companies (Discoms) - Paschimanchal (Meerut), Dakshinanchal (Agra), Purvanchal (Varanasi), Madhyanchal (Lucknow) and KESCO (Kanpur) is likely to be issued tomorrow by giving the bidders a time of one month to respond.

The prominent private companies who have bid for the 1000 MW thermal power project are Reliance Energy, Tata Power, Essar Power, Torrent Power Private Limited, Aditya Birla Group and US company AES.

Sources however maintained that the main contenders would be Reliance and Tata.

Meanwhile, the U.P. Power Employees Sangharsh Samiti has announced to boycott work for one hour on December 3, two hours on December 4 and for 72 hours on December 6, 7 and 8 in protest against the privatisation of the power sector.

All India Power Engineers Federation secretary- general Shailendra Dubey here said if the Government did not stop the privatisation process, the employees would be forced to go on an indefinite strike. Sources said the Energy Task Force constituted under the chairmanship of Chief Secretary V K Mittal had also given a go-ahead on the privatisation process in the power sector. As per information eleven major power generation companies have purchased tender forms for the Anpara C power project.

Officials said that within the next five days, the tenders would be shortlisted and on November 5 the qualifying tenders would be announced.

However, the entire process for handing over the Anpara C project to private players would take at least two months time.

Anpara C is the third phase of the Anpara Thermal Power Project in Sonebhadra with Anpara A having a generation capacity of 3x210 MW and Anpara B 2x500 MW. The Anpara C project has in the past generated enough political heat in U.P. The proposed project is pending for over a decade now. Anpara A and B were commissioned in the early 90s.

The previous BJP-BSP Government had even invited the Organisation for Economic Corporation and Funding (OECF) to finance Anpara C as they had funded Anpara A and B, but nothing materialised. Later an MoU was also signed with the Japan Bank for International cooperation (JBIC) to finance the project but it did not take off.

The former Kalyan Singh Government in 1997 had invited Hyundai Company to take over the Anpara C project but that too failed.

UNI

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