UP shortlists Torrent, REL, Tata

Questions over Dadri project forces UP Govt to expedite process

The Torrent Group, Reliance Energy Ltd and Tata Power are among the five shortlisted entities for the majority stakes in five electricity generation and distribution entities in Uttar Pradesh.

It has been learnt that the Mulayam Singh's UP government would shortly finalise one or two companies that would be awarded the licenses for generation and distribution of power in five major circles.

Torrent Group, under the banner of the Ahmedabad Electricity Company (AEC), had submitted its bid during last quarter of 2004 in response to the bid invited by the Uttar Pradesh Power Corporation Ltd (UPPCL) following its decision to restructure the power sector armed with the UP Power Policy, 2003.

However Torrent Power AEC Limited (TPAL) will have to sweat it out with two major domestic players and the two overseas players who are also eyeing for a stake in these companies in Lucknow, Agra, Meerut, Varanasai and Kanpur.

"The Torrent Group is bidding for generation and distribution licenses in UP and is among the initially short listed players," said a company spokesperson here on Sunday. He denied to divulge any further information 'at this moment.'

Eight domestic players had shown their interest in taking over the distribution in five major circles of UP. Apart from Torrent, Reliance and the Tata Power, the interested companies include Essar Power, Calcutta Electricity Supply Company (CESC), Larsen & Toubro and GVK Group.

"These eight entities, apart from a few foreign players, had picked up bid documents in response to the tender. Torrent, Reliance and Tatas have been shortlisted. A decision about awarding license to either one company or more companies would be taken shortly, may be after the elections," said a source close to UP state government.

"With confusion over the mega power project in Dadri, which was to be developed by Reliance, the Corporation now wants to be ready with supplementary arrangements for enough power for the State, especially to ensure that industrial activities do not get affected. Majority stakes in five distribution companies, Kesco (Kanpur), Varanasai, Lucknow, Meerut and Agra will be diluted following which privatisation in other circles also may be carried out," the source added.

Interestingly, Gujarat Government which had a few months ago decided to introduce a power franchisee system like the ones in Mumbai and New Delhi, now have backed out following strong protest from employees of Gujarat Electricity Board (GEB).

So, private players which have earlier shown interest to invest in power sector in Gujarat, have now been looking for alternative locations in which UP stands as one of the major destinations.

However, sources in state Energy Department in Guajrat, said that once GEB employees' stir gets dampened, taking the advantage of 'open access system,' state government would come out with partial privatisation of the distribution and generation activities in Gujarat to minimise distribution losses and the menace of electricity theft.

Torrent Power, under the banner of a newly created entity Torrent Power Generation Limited (TPGL), is setting up a 1100 MW gas based mega power project at Akhakhol near Surat entailing an investment of more than Rs 3000 crore.

With the commissioning of this plant by 2007, Torrent Power would have a total generation capacity of 1600 MW.