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AES, Reliance in talks for Orissa power distribution business

Imran Khan in Bhubaneswar

American power giant AES Transpower is negotiating with the country's major corporate house Reliance Group of companies for taking over the power distribution business in Orissa, official sources said Friday.

Sources said that negotiation between AES and Reliance is likely to materialise because the later was keen to expand its business in the power sector.

"We have learnt that AES and Reliance are discussing the take over business in the state" sources in the state government said.

Sources said that negotiation started between the two following AES's decision, last months, to exit power distribution business in Orissa.

Only last week Orissa government allowed AES to sale its majority stake in the Central Electricity Supply Company to any third party conditionally.

Sources in Reliance told rediff.com in Bhubaneswar that the company is interested in power sector business in Orissa. Reliance is eyeing to set up the biggest power plant in the state.

Sources further said that Reliance is also keen to buy AES's share in Orissa Power Generation Corporation. OPGC has two thermal power units in Jharsuguda district. AES Transpower is a 49 per cent shareholder in OPGC.

Meanwhile, Orissa government has issued a notice to AES to settle the disputes between Grid Corporation of Orissa Limited and AES managed Cesco one of the four private power distribution company in the state.

Gridco's chairman and managing director Priyabrata Patnaik in his notice to the president and chief executive officer of AES Corporation Dennis Bakkle has also demanded the same.

AES's CEO Bakkle has been invited by Patnaik to a meeting on October 4 in this regard, sources said.

It may be recalled that AES had offered to sell its shares worth $12 million at a reduced price to Gridco last month, but the offer was rejected by Gridco board.

Although AES continues to be the major shareholder in the distribution company, Cesco, the state government has appointed an administrator for day to day management of the company following a directive from the Orissa Electricity Regulatory Commission.

AES owns 51 per cent stake in Cesco, while Gridco, an Orissa government company, has 39 per cent stake, and is solely in-charge of power transmission. The employees of the utility own the remaining 10 per cent shares.

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