Tata Power gets LoI to take over two more discoms in Odisha
BHUBANESWAR: The Tata Power on Friday said it has received the letter of intent (LOI) from the Odisha Electricity Regulatory Commission (OERC) to take over power distributors Wesco and Southco, involved in retail power supply in western and southern Odisha. The company won the bids opened on Thursday.
While Tata will hold 51% equity with management control and the state-owned bulk power supplier GRIDCO will have the remaining 49%. The license period for the two distribution utilities shall be 25 years, official sources said.
As per the deal, Tata Power will spend Rs 2,830 crore in five year towards capital expenditure. The OERC, in a release, said Tata Power will spend Rs 1,167 crore in Southco and Rs 1,663 crore in Wesco by 2026. The company will collect Rs 300 arrears in Wesco area and Rs 100 crore on Southco. While Wesco distributes power in Rourkela, Burla, Bhawanipatna, Balangir, Bargarh circles, the Southco is involved in retail supply in Ganjam city, Berhampur, Aksa, Bhanjannagar, Jeypore and Rayagada.
A Tata Power statement said the licence enables it to serve the consumers of western and southern parts of Odisha with geographical spread of more than 47,000 Sq km each. With the addition of both the discoms, Tata Power’s consumer base will reach 10 million consumers from the present base of 5.7 million across Mumbai, Delhi, central part of Odisha and Ajmer.
The statement attributed Praveer Sinha, CEO & MD, Tata Power, as saying, “It is a proud moment for us. We are thankful to the Odisha government and OERC for giving us this opportunity. We are committed to provide reliable, affordable and quality power supply along with superior customer service, backed by innovative technology.”
Other than Tata Power, a consortium of India Power Corporation and French government-owned Electricite de France (EDF) had bid for the two power utilities. However, their bids were found technically not qualified. For another power distributor in the state, Nesco which is involved in retail supply in northern Odisha districts of Balasore, Mayurbhanj, Keonjhar, Jajpur and Bhadrak, Tata Power is the only bidder. The OERC is yet to take a decision on it.
Tata Power had earlier taken over CESU, the distributor in central Odisha, with effect from June 1.
Odisha is the first state in the country to privatize power distribution companies (discoms) in 1999. The three discoms, Wesco, Southco and Nesco, were with Reliance Infrastructure’s BSES. The OERC revoked the distribution licence in 2015 after more than a decade of legal disputes.