Torrent Power's agreement to distribute power in Kanpur cancelled

Agreement with was signed by Kanpur Electricity Supply Company on May 18, 2009

Uttar Pradesh today cancelled the agreement signed with Torrent Power in 2009 to distribute electricity in Kanpur.

The state cabinet meeting here chaired by chief minister Akhilesh Yadav gave its nod to the proposal of scrapping the agreement.

The agreement with Torrent Power Limited was signed by Kanpur Electricity Supply Company (KESCO) on May 18, 2009 during the previous Mayawati regime for the input based franchisee model.

The model was propped up for distributing power in select urban centres of the state, including Bareilly, Moradabad, Gorakhpur, Varanasi, Allahabad, Aligarh and Meerut.

After a bidding process, Torrent was selected to distribute power in both Agra and Kanpur, which were taken up in first phase since the transmission and distribution losses were the highest in these places at 42 per cent and 47 per cent respectively.



Torrent was then supposed to buy power from UP at the rate of Rs 1.96 per unit and Rs 2.17 for Agra and Kanpur respectively for distribution to urban consumers and later realise revenue. The prevailing realisation by UP Power Corporation Limited (UPPCL) at Agra and Kanpur stood at Rs 1.33 and Rs 1.68 respectively.

While, Torrent Power could take up power distribution in Agra, albeit after opposition from the state electricity department employees, the model could never take off in the industrial hub of Kanpur.

However, five years passed since the agreement was signed in 2009 and the electricity distribution task could not be transferred to the Ahmedabad-based Torrent Power.

Since, the financial basis of KESCO changed over the years, it was felt that pursuing the agreement would not be in the interests of the state energy department.

In this context, a meeting was held between the representatives of the both the companies on December 27, 2015, which had agreed upon mutually to cancel the agreement. The cabinet put its seal of approval to this proposal.