MP to rope in big firms for power distribution

In view of the shortage of employees and growing power pilferage, MP has planned to rope in big distribution firms on a long-term franchisee basis.

Reliance Energy, Tata Power, Torrent, CESC and AES have reportedly shown interest in power distribution in the state. Short-term franchisees have been awarded to distribution companies and they will start functioning from February 1.

"We have to improve our distribution system and for that we must have private players in the business. Those who are interested are welcome," Power Secretary Sanjay Bandopadhyay told Business Standard.

Madhya Pradesh Power Distribution Companies (DISCOMs) have started franchisee contracts to small firms. Madhya Pradesh Purva Kshetra Vidyut Vitran Company (East Zone discom) has awarded its first franchisee contract to Bangalore-based Enzen Global.

"With effect from February 1 the company will take over the Kareli (district Narsinghpur) headquarters distribution network at Rs 1.81 per unit. Kareli has 5,000 consumers," a source in the discom told Business Standard. Expressions of interests have also been floated for Satna and Damoh.

The state has plans to provide its contingent of approximately 20,000 distribution staff to private firms and in lieu of that they will get incentives from the company. Once a company starts work, the government-owned discoms will offer a choice to their employees whether to migrate to the companies. In case a company wants to withdraw, the existing system will continue.

"With the process of private distribution, started in June last year, some players have entered the fray and now big firms might be working out plans for big operations since they might be interested in long-term franchisees, not less than 12 years, at districts and divisional headquarters," said the source, adding, "the input rates (not the tariffs) will be revised at regular intervals and if a company's performance and efficiency fall short of expectations, the discom may terminate the franchisee contract at any level."

With 37,350 Mw private power projects proposals on hand, Madhya Pradesh is yet to cut down its transmission and distribution losses. Despite the availability of power, remote areas are powerless.

"Power theft is a big problem. Though there have been efforts to cut it down, it still hovers above 40 per cent of the power generated," a government source said.

The state distribution network has 190,000 power distribution transformers, while in some areas one employee covers 25 villages.