Comments
.
Steel Authority of India Ltd's (SAIL) initiative to appoint private electricity distribution franchisee in four integrated steel plant townships, witnessed lukewarm response from power sector majors.
Of the four townships, Durgapur in West Bengal attracted only one bid.
Sources told Business Line that Kolkata-based CESC Ltd is the only major power distributor to have submitted proposal against a SAIL tender, which was closed in April.
The RP-Sanjiv Goenka Group flagship, catering nearly 25 lakh consumers in Kolkata, expressed interest for franchisee distribution in SAIL townships at Bokaro in Jharkhand and Bhilai in Chhatishgarh.
Apart from CESC, a Gurgaon-based smart grid technology solution provider to electricity distribution agencies submitted bids for all four townships – Durgapur, Bokaro, Bhilai and Rourkela (Odisha). SAIL now distributes electricity in the townships.
The four townships have a combined population of eight-nine lakh. In addition to residual accommodation for a little over one lakh of SAIL staff members, the townships also have business and commercial establishments, large contingent of security forces, schools, hospitals and others.
Bhilai has attracted maximum of four proposals from A2Z, CESC, GTL and Shyam Prayas. Bokaro received bids from A2Z, CESC and GTL. Rourkela attracted interest of A2Z, Shyam Prayas and Engene.
GTL was recently appointed by Maharashtra state utility as a franchisee distributor of Aurangabad.
Risky model
According to a major private power distributor which decided against submitting bids, revenue risk associated with the model proposed by the public steel major acted as a major deterrent to participate in the tender.
“There are high incidences of illegal drawals from a number of such townships. Moreover as per the existing policy schools, hospitals are offered free electricity. As per the model proposed by SAIL, the franchisee will be responsible for operation, maintenance and upgrade of the power distribution system, meter reading, billing and recovery.
“However, they keep tariff on a tight lease,” a source said.
According to sources, while the franchisee is given minimum capital investment targets, SAIL will retain the right for filing tariff petitions. Moreover, the model is unclear on cost recovery in case of meeting power deficit through open purchase.
“There will not be any increase in tariff after appointment of distribution franchisee,” a SAIL official confirmed.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.