US-based power utility major AES will not be disqualified by the Orissa government from bidding for power distribution ventures.
Questions had been raised about the consortium of AES and Jyothi Structures being allowed to bid for power distribution ventures in the state after AES struck a deal with the state government for acquiring 49 per cent stake in Orrisa Power Generating Corporation's 420 mw project.
According to conditions laid down by the state government, a generating company cannot retain interest in power distribution in a given area.
Sources said that even if the selloff gets state cabinet approval, AES will not be disqualified as the company operating the power generating project is Orrisa Power Generating Corporation and not AES.
This implies that the apex company of AES can promote both the power generating project and the distribution venture simultaneously.
"The distribution bid only lays down that the power generating company cannot directly promote the distribution company," official sources said.
AES had offered Rs 603 crore for the stake in the OPGC project. Although the deal was struck in June, the state cabinet is yet to formally approve the divestment.
Meanwhile, the state government had also invited bids for divesting 51 per cent in the distribution venture.
AES-Jyothi Structures is one of 11 consortiums that have bid for power distribution ventures.
The bid from the consortium of AES and Jyothi Structures was pre-qualified by the state government as the divestment in OPGC had not been cleared by the state cabinet.