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Pratim Ranjan Bose

Kolkata, Oct. 5 Damodar Valley Corporation (DVC) plans to appoint SBI Caps to study the commercial viability of the proposed joint venture with private parties for retail power distribution in Dhanbad, Bokaro, Hazaribagh and Giridih in Jharkhand. Tata Power, Torrent Power and CESC have already expressed interest to partner DVC in the proposed distribution foray.

“We have already appointed the Central Electricity Authority (CEA) for technical evaluation of the projects and are in the process of appointing SBI Caps to study the commercial aspect. This is expected to be through in the next few days,” a DVC official told Business Line.

“Based on the reports submitted by CEA and SBI caps, we will prepare the final notice inviting tenders for joint venture participation from Tata Power, Torrent and CESC,” he added.

The time-frame for submission of the report is yet to be firmed up. On possibility of forming more than one joint venture, sources said that all such details would be finalised after techno-economic evaluation of the circles.

Though all the areas identified are under DVC command area, the retail distribution is now handled by the Jharkhand state Electricity Board (JSEB) as the DVC Act prohibits the power utility to undertake retail distribution activities on its own. The Corporation, however, is allowed to sell power directly to industry in its command areas.

Opportunities opened up before DVC to enter the retail distribution earlier this year when JSEB announced its plan to entrust the responsibility of retail distribution to DVC, owing to technical as well as financial constraints.

In a bid to bypass the legal constraints, DVC opted for the joint venture route to enter the business. Joint ventures are also expected to take over the existing distribution infrastructure of JSEB in Dhanbad, Bokaro, Hazaribagh and Giridih.

Meanwhile, DVC has decided to include approximately 15 per cent ECB component in the Rs 2,800-crore loan financing for the proposed 1,000-MW Durgapur thermal power station. Rural Electric Corporation had already sanctioned a rupee term loan for the entire requirement.

“We have recently requested REC to revise its sanctions to include the ECB component in the project. Once the revised sanction is available we will go for financial closure,” a source said. According to him, the ECB route will be used to meet payment obligations to contractors in foreign currency and also reduce the pay-back period of the project.

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