Crompton Greaves to distribute power in 3 Nagpur divisions

The power equipment manufacturing giant Crompton Greaves is making a foray into electricity distribution in Nagpur. The company has bid the highest amount to win the franchising contract from the state-owned power discom Mahavitaran.

Speaking to reporters, Mahavitaran's Managing Director A B Pandey said, "Crompton Greaves quoted Rs 2.05 per unit as the price for power in the first year of the 15 years franchisee contract, which they will purchase from Mahavitaran as against the benchmark Rs 1.70. In the 15th year of the contract, the company will pay Rs 4.68 to Mahavitaran against the benchmark price of Rs 2.43."

Pandeyfurther said, "At the end of 15-year contract with Crompton as per our benchmark prices at present tariff level, MSEDCL would have got Rs 1,800 crore, but Crompton Greaves has promised to pay Rs 2,600 crore."

Crompton's was the highest of the six bids for the contract for the three divisions of Nagpur. Among others who bid for the project included Tata Power, Torrent Power, Madhukon and Kalpataru.

As per the guidelines set in the Electricity Act 2003, Mahavitaran has decided to give out six cities in Maharashtra, where the percentage of transmission and distribution losses (T&D) was over 35 per cent, to improve efficiency and increase revenues.

The average T&D losses in the Gandhinagar, Mahal and Civil Lines divisions of Nagpur being given out on franchisee was around 42 per cent, Pandey said.

The other cities which will be given out to franchisees include Aurangabad, Ahmadnagar, Jalgaon, Malegaon, Ulhasnagar änd Kalwa-Mumbra.

"We have made some improvements in the tender condition from our previous experience of giving out the Bhiwandi division to a franchisee. Now, it has been made mandatory for franchisees to cut the T&D losses and the franchisee will have to stick to the schedule of loss reduction set by Mahavitaran," he said.

However, franchise will have a right to recover the extra cost, he would required to incur to buy power. This concept is based on the Pune model, he added.