PwC's report on UP power in a year

State divided into 5 power zones

The Uttar Pradesh government has initiated the process of privatising the power distribution system in the state. It would be completed in the next few months.

The state government has appointed PricewaterhouseCoopers (PwC) as consultant to complete the formalities within 12 months. PwC will assess the losses of the Uttar Pradesh Power Corporation (UPPCL), update records, verify the inventories and prepare a roadmap for improving efficiency.

"The move is aimed at privatising the power distribution system in the state," said the power secretary and UPPCL chairman, Arun Kumar Mishra.

The government has divided the state into five zones""Meerut, Agra, Lucknow, Allahabad, and Kanpur""based on geographical considerations and power needs. The zones have functional power distribution companies, and the government plans to privatise all of them at one go.

Power reforms in the state started in January 1999 with the trifurcation of the erstwhile Uttar Pradesh State Electricity Board. But the reforms got halted because of political reasons and opposition from power board employees.

The state government had earlier tried to privatise the Kanpur Electricity Company. But not much resulted.

It is learnt that this time Tata Power, Reliance Energy, and the Birlas are taking keen interest in investing in the distribution sector, which has given a boost to the state government's efforts.

Mishra is confident the privatisation process will get under way in the next few months.

"We have given PwC 12 months. But we are hopeful the process will be completed by early next year," Mishra told Business Standard. "Keeping in view the interest shown by the reputed power companies and our commitment, we are hopeful it would be completed much before the deadline," he added.

The state government plans to begin the process by issuing a request for qualification (RFQ) this month itself, which will be followed by due diligence and a request for proposal (RFP).

"We are also working out the individual electricity allotment to the five distributing companies on the basis of MBMS (multi-buyer and multi-seller) module," Mishra said.