Five firms keen on Odisha power distribution business

Cos eyeing to work as distribution franchisee include Crompton Greaves, Tata Power

As many as five companies including Crompton Greaves Ltd (CGL) and Tata Power Delhi Distribution Ltd (TPDDL) have expressed interest to work as power distribution franchisee in Odisha during a workshop organised by Gridco Ltd and Rural Electrification Corporation (REC).

Others were Bombay Stock Exchange (BSE)-listed Spanco, Calcutta Electric Supply Corporation (CESC) and SPML Infra Ltd.

"One more company Essel Utility, a power distribution franchisee in Madhya Pradesh, is also keen to take up franchisee business in the state, but could not attend the workshop today,” said a spokesperson of Gridco.

The distribution franchisee business helps power distribution companies (discoms) to outsource some tasks by dividing their catchment area into small patches and engaging one of the franchisee.

The franchisee’s job would be to supply and distribute electricity, take down metre readings, distribute bills, collect revenue, maintain low-tension lines and attend fuse-off calls.

The workshop, Distribution Franchisee Models in India-Evolution and Future, was organised to understand the issues involved in the business across various states of India.

"During the presentation, the companies said that they need more hand holding support and a longer period of contract, up to 15 years, to participate in this type of business model. We will sit together with the government before coming up with RFP (request for proposal) tender,” said A K Bohra, chief executive officer of Nesco, Wesco and Southco, the three discoms managed by Reliance Infra in the state.

Distribution franchisee business is not new in Odisha as Central Electricity Supply Utility, managed by Odisha Electricity Regulatory Commission (OERC), had outsourced its operation to three companies. Reliance Infra also engaged few companies for bill collection in the areas under its jurisdiction.

However, such type of business model is facing several problems in the state, particularly related to bill collection as a number of self-help groups (SHGs) who were earlier paid by discoms for collecting bills have opposed the appointment of distribution franchisees.