NTPC not to bid for RInfra stake in BSES

Twesh Mishra New Delhi | Updated on September 26, 2020 Published on September 26, 2020

In May, NTPC had expressed interest in buying out Rinfra’s stake in the Delhi discoms   -  Sandeep Saxena

The PSU major cites lack of transparency in bidding process

NTPC Ltd will not compete for buying Reliance Infrastructure’s (RInfra) stake in BSES power distribution companies citing concerns over the bid processing.

The two joint venture companies are BSES Rajdhani Power Ltd (BRPL) and BSES Yamuna Power Ltd (BYPL) where Reliance Infrastructure and the Delhi government are partners (51:49 joint venture). Senior officials in the know told BusinessLine that the present bidding format does not meet NTPC’s due diligence requirements as it was not transparent.

“Bidding for RInfra’s stake in BSES should be conducted by the Delhi Electricity Regulatory Commission (DERC) to ensure the needed transparency for the Public Sector Undertaking to participate,” the official said adding, “It is the responsibility of the regulator to ensure that the consumers are not taken for a ride.”

“There is significant lack of transparency in the current bid process for RInfra’s stake in BSES power distribution companies (Discoms). This is because it is not being conducted by the regulator. NTPC will not be able to participate in the bidding process under such an arrangement,” the official said.

In May, NTPC had said that it wanted to buy out the 51 per cent stake of Reliance Infrastructure from Delhi’s power distribution companies.

DERC washes off hands

In a letter to DERC, NTPC expressed its interest to enter the power distribution sector and acquire the distribution assets. But subsequently DERC washed its hands off the stake sale process saying that BSES is a private company and that it would just approve the outcome of the bidding.

While BRPL serves south and west Delhi and BYPL caters to central and east Delhi. The companies were acquired in 2002 when Delhi’s Discoms were privatised. As of March, BSES served 44 lakh customers in the national capital. The two other Discoms in Delhi are Tata Power Delhi Distribution Ltd and New Delhi Municipal Council.

“The present stake sale can be compared to the exit of BSES from the earlier attempt to privatise the Discoms in Odisha. After BSES stepped aside from the process, it was the Odisha Electricity Regulatory Commission (OERC), which conducted the bidding and selected the next entities for privatisation,” the officials in the know said.

ADAG has been trying to cut debt by selling stake in group entities. In August 2018, Reliance Infrastructure sold its energy business in Mumbai, including generation, distribution and transmission, to Adani Transmission for ₹18,000 crore.

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Published on September 26, 2020
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