Crompton Greaves retains three power distribution divisions

Mumbai: Maharashtra State Electricity Distribution Company Ltd (MSEDCL) will give three divisions in the Nagpur circle to Crompton Greaves Ltd for distribution of power. Earlier in the year, the loss-making Bhiwandi circle was handed over to Torrent Power for similar purpose.

Aurangabad, Ulhasnagar, Kalwa, Ahmednagar, Dhule, Malegaon and Jalgaon circles could also be soon offered to private companies.

The Union Power Ministry had decided to give loss-making circles to the private sector for distribution considering the mounting losses of state-owned distribution companies and State electricity boards across the country were incurring.

Mr A.B. Pandey, Managing Director of MSEDCL, said Crompton Greaves would take over the divisions by this year-end. It would sign a ‘distribution franchise agreement’ for 15 years to distribute power to 3.02 lakh consumers in the divisions. While net present value of the contract was Rs 2,600 crore, MSEDCL had calculated it to Rs 1,800 crore, he added.

Kalpataru Power Transmission Ltd, Madhucon Projects Ltd, Tata Power Ltd, Torrent Power Ltd and Wipro had also bid for the circles. However, Crompton Greaves bagged the order on account of a higher net present value, he said.

The three divisions have registered transmission and distribution losses of 42 per cent and Crompton Greaves had committed to reduce the losses by 10 per cent in first year, six per cent in second, five per cent in third and two per cent in fourth year of operations. At the end of the contract period, the losses would be down to 12 per cent. The annual requirement of the divisions is about 1,040 million units (MU), with low tension consumption of 900 MU and 140 MU of high tension consumption, Mr Pandey said.

Mr Pandey, however, said that MSEDCL would not privatise distribution in all circles, but only those with losses of over 30 per cent. “It should not be interpreted that we have opened our doors to privatisation. The fact remains that MSEDCL is still in the red. Therefore, giving power circles to private players is the way out,” he said.