BackCESC unit places the highest bid for Chandigarh discom
Torrent Power, NTPC Ltd, and ReNew Power Ltd had quoted ₹606 crore, ₹563 crore, and ₹551 crore, respectively
PremiumEminent Electricity Distribution Ltd, a subsidiary of Kolkata-based CESC Ltd, has placed the highest bid of ₹871 crore to acquire the electricity distribution business for Chandigarh, said two people aware of the development, seeking anonymity.
The RP-Sanjiv Goenka Group company emerged as the highest bidder when the financial bids were opened on Wednesday. Torrent Power, state-run NTPC Ltd, and ReNew Power had quoted ₹606 crore, ₹563 crore, and ₹551 crore, respectively, while the Adani Group, Tata Power, and Sterlite Power placed financial bids of ₹471 crore, ₹426 crore, and ₹201 crore, respectively. Deloitte is running the sale process.
The bid was called by Chandigarh’s engineering department as part of the privatization process of the Union territory’s (UT’s) electricity distribution companies (discoms) for “distribution and retail supply of electricity and having distribution licence in the UT of Chandigarh". But the process has met with legal challenges.
“We emerged as the highest bidder, beyond that we cannot comment," a RP-Sanjiv Goenka Group spokesperson said. Queries emailed to spokespersons of Deloitte, Torrent Power, NTPC, ReNew Power, Adani Group, Tata Power, and Sterlite Power on Wednesday did not elicit any immediate response.
Mint had earlier reported on the privatization of discoms in eight UTs, which was articulated by Union finance minister Nirmala Sitharaman while announcing the fourth tranche of the ₹20-trillion stimulus package to tackle the economic fallout of the pandemic.
Last week, Union power secretary Alok Kumar said UT discom privatization exercise had progressed, and the Union Cabinet’s approval would be sought to award the Dadar and Nagar Haveli utility.
Deloitte is also running the sale process for the discoms in Puducherry and Andaman and Nicobar Islands, while SBI Capital has the mandate for Dadar and Nagar Haveli, Daman and Diu, Jammu and Kashmir, and Ladakh.
Torrent Power placed the highest bid for power discoms of Dadar and Nagar Haveli, and Daman and Diu. The other bidders were ReNew Power, Adani Group, and CESC Ltd. The requests for proposal for the Andaman and Nicobar Islands and Puducherry are being finalized. This will be followed by the process for Lakshadweep utility. For Jammu and Kashmir, a study is being conducted on possible options.
Discoms have traditionally been considered the weakest link in the electricity value chain. The Centre is trying to address the concerns amid growing private sector interest in India’s electricity distribution sector.
The Electricity (Amendment) Bill, 2021, proposes measures, such as delicensing of the power distribution business, to make the sector more competitive.
The draft law is expected to be introduced in the ongoing monsoon session of Parliament. Discom losses have also fallen by more than a third to ₹38,000 crore from ₹61,360 crore in FY19, according to government data.
Meanwhile, India’s peak electricity demand recorded an all-time high of 200.57 giga watt (GW) on 7 July. In addition, the cabinet committee on economic affairs approved the marquee ₹3.03 trillion power discom reform scheme. The scheme, to be applicable till 2025-26, aims to reduce India’s aggregate technical and commercial (AT&C) loss to 12-15% from 21.83% in 2019-20, and gradually narrow the deficit between the cost of electricity and the price at which it is supplied to ‘zero’ by 2024-25
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