Dvb Arms Selloff Fetches Rs 481 Crore

The Delhi government today privatised the three power distribution companies of Delhi Vidyut Board giving up 51 power cent of the share holding in two of the companies to BSES and the other to Tata Power for a total consideration of Rs 481 crore.

The state chief minister said by June 30, 2002, DVB will be split into six companies including the three distribution companies (DISCOM), a hloding company, generation and a transmission company. The bidders will have to execute the Sahreholders Agreement and take over the management of the three DISCOM by that date.

An official release said going by the asset value method the valuation of DVB works out to Rs 3,160 crore while its book value is Rs 3,024 crore but based on the unaudited accounts of the Board.

Dikshit said there will be however be a common retail tariff all over Delhi during the initial five years of the operation of the privatised DISCOMs which means there will be no sudden rise in electricity tariff as of now. During this period the transmission company (TRANSCO) will receive a loan support of Rs 3,450 crore from the state government to bridge the possible difference between the bulk supply price from the DISCOMs and the price of the electricity from the generation company.

Both companies have agreed to reduce distribution losses by 17 per cent in the next five years against the 20 per cent target projected in the bid documents by the state governments. Infact the dealy in the finalisation of the bids was due to the even lower commitments made by the bidders. The governmen had to set up a "core committee consisting of senior officers who negotiated with the bidders for the past six weeks" to reach todays' "negotiated agreement", an official release said.

BSES has won the bid for taking over the management of South and West Delhi DISCOM for Rs 235 crore and for Central and East Delhi for only Rs 59 crore. Tata Power would pay Rs 187 crore for the North and NorthWest Delhi. Under the Agreement signed today BSES has agreed to reduce the losses (called Aggregate Technical and commercial losses ) by 17 per cent by five years for South West DISCOM and 17.25 per cent for Central East DISCOM.

Tata power has also agreed to reduce the total loss in its DISCOM by 17 per cent within the next five years.

The government said the loss reduction model for the DVB privatisation is based on the Orissa experience. Tata power and BSES cannot also retrench employees and must extend the same terms and conditions to them in the successor comapnies as they had enjoyed earlier.

The revised agreemtn signed today has also stipulated that the moratorium on repayment and interest waiver on Holding Comapny debt will be availabel for four years instead of three. However if the loss reduction in any DISCOM is better than targeted, the company will be allowed to retain 50 per cent of the additional revenue resulting from such better performance. For a shortfall however the entire lss shall be borne by the DISCOM.