Gridco Spvs Draw Bids From Bses, Reliance

The financial bids submitted by the major power companies to Grid Corporation of Orissa (Gridco) will be opened in the second week of December.

Eleven companies, including, Reliance, BSES and multinationals like National Power and Track Bell have submitted their proposals. Technical evaluation of around 10 companies has been completed.

The bids propose to acquire a 51 per cent controlling stake in the four special purpose vehicles floated by Gridco last month to privatise power distribution in four zones in Orissa. The SPVs are Central Distribution Company, North Eastern Distribution Company, Southern Distribution Company and Western Distribution Company.

Gridco has completed the asset liability allocation for each company. This has also been brought out by the authorities in the gazette notification of the government of Orissa on November 27.

Grid corporation has fixed the commencement date of operations for the four companies in end 1998-99.

In September, it visited the site of investors who pre-qualified. They were then asked to submit financial and technical bids.

Gridco came into existence on April 1, 1996, when Orissa became the first state in India to initiate reforms in the power sector. The reforms were based on the recommendations of World Bank which is also funding the project.

The project was initiated when Gridco's predecessor Orissa State Electricity Board became a white elephant with mounting losses and very low collections.

The electricity board was financially dependent on the state government for subsidies which were cut once Gridco was formed.

The new company has been able to access funds from the market. Last month, Gridco completed its Rs 300 crore borrowing programme successfully, after competing against Andhra Pradesh and Maharastra state government bond issues.