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7 bidders qualified for Delhi power privatisation

Five domestic and two overseas companies have qualified to bid for 51 per cent stakes in three power distribution companies being privatised in India's national capital, an official close to the deal said on Tuesday.

In February, the Delhi government invited prospective buyers with a net worth of Rs 50 billion and revenues of Rs 100 billion in the previous year to submit qualifying applications by May 15.

The five domestic companies which have qualified to bid are Reliance Power Ltd, Tata Electric Companies, the A V Birla group, Bombay power distributor BSES Ltd, and CESC Ltd which distributes power in and around Calcutta.

Hong Kong-based China Light and Power and the Indian arm of American firm AES, AES India Pvt Ltd, are the two foreign firms which submitted qualifying applications.

The Delhi government is carving up its power utility, the Delhi Vidyut Board, into one generation, one transmission and three distribution companies and aims to sell 51 per cent stakes in the distribution companies.

The Delhi Vidyut Board is projected to post revenue of Rs 49.859 billion in 2001-02. It had a peak load of 2,600 MW of power in 1999-00.

"The qualified companies can bid for all the three distribution companies, or one or zero," the official said.

DVB's privatisation is expected to reduce the city's frequent black-outs and cut rampant power theft. It is estimated the utility is paid for only about half the electricity consumed.

The process is part of India's decade-old programme to reform its power industry.

Several states including Orissa, Rajasthan and Andhra Pradesh are splitting up and privatising their power utilities. Only Orissa has completed the process.

The notification of new tariffs by Delhi's power regulator, expected shortly, would be the next step in the privatisation process. The government would then decide the criteria for selecting bidders and later invite proposals.

The privatisation was earlier scheduled to be wrapped up by the end of September but could be delayed by up to two months.

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