NTPC drops plan to bid for BSES discoms, cites lack of transparent process

NTPC drops plan to bid for BSES discoms, cites lack of transparent process

State-owned NTPC, India’s largest power generator, has dropped its plan to buy out Reliance Infrastructure stake in two power distribution licence areas in Delhi.

The power retailing rights are currently controlled by joint ventures of Reliance Infrastructure and the state government.

NTPC had in May showed interest in the stake sale but has now cited “lack of transparent process” for not taking part in the bidding. It is, however, looking to take part in the discoms bidding in two Union territories — Puducherry and Chandigarh.

Company sources said NTPC dropped the plan because the bidding was not being conducted by the Delhi Electricity Regulatory Commission (DERC).

“BSES is a public utility and thereby we expected the bidding to be held by DERC. As that is not happening, we are no longer evaluating it in our business plans,” said a company executive. Industry sources, however, said the sale process was now on hold.

In May, NTPC had written to DERC expressing its interest in the sale of majority stake in Reliance Infrastructure-promoted two power distribution companies (discoms) in Delhi — BSES Yamuna Power and BSES Rajdhani Power. NTPC mentioned in its letter that it was keen on BSES discoms, provided “the equity sale is done through a transparent process”.

Executives said the sale process of BSES discoms should follow the same model as Odisha where the state’s electricity regulator — Odisha Electricity Regulatory Commission — is bidding out rights to distribute electricity. Odisha recently offered three of its discoms — Northco, Southco, and Wesco — for sale. Tata Power and India Power placed bids for these discoms.

Tata Power in December last year won the licence for retailing electricity in Bhubaneswar, Cuttack, Paradeep, and Dhenkanal in Odisha.

According to reports, DERC has refused to oversee the sale process of BSES discoms. DERC could not be reached for an official comment.

Reliance Infrastructure owns 51 per cent each in both the power distribution companies. The rest is owned by the New Delhi government through Delhi Power Company.

Discoms in Delhi were privatised in 2002 when two went to Reliance Infra and one to Tata Power. In central Delhi area of the city, New Delhi Municipal Corporation runs the power distribution.

In June, Reliance Infra removed consultancy firm KPMG from the sale process of the BSES discoms, and has not appointed any new consultant since. In 2017, Reliance Infra sold its power distribution business of Mumbai to Adani Electricity, a wholly-owned subsidiary of Adani Transmission.