We May Take Btl Public

BSES, Chairman & Managing Director, RV Shahi on his future plans

Q: How is the telecom business shaping up?

A: We initially started with optic fibre network to connect remote stations. This involved a 1400 km network.

But having created the network we found that it has tremendous capacity beyond its requirement to take care of modern electricity distribution requirement. We realised that this could be used by BSES telecom (BTL) for its

ISP. We launched our Internet services on March 29 this year. At present, BSES Telecom Ltd has category B licences in Mumbai. We also acquired A category license whereby we can spread to other towns and cities. This will be done gradually. We have also set up a joint venture with Sriven Multitech to develop touch screen kiosks in different parts of the country. This will enable those with little Internet knowledge to use the facilities with a bit of guidance on the touch screen.

 

The important advantage is the extensive optical fibre giving the user larger bandwidth making receptivity better and faster. Every consumer will have two Mbps of bandwidth, the highest amongst ISPs.

Q: Are you planning an IPO for BTL?

A: We plan to invest nearly Rs 300 crore in the coming years. The equity capital of BTL has been increased to Rs 70 crore. We may consider an IPO by the end of this financial, but its investment portfolio will be reviewed from time to time . Thus we will take full advantage of convergence of electricity distribution and telecommunications.

Q: How do you plan to turnaround the Orissa distribution network?

A: We took over three out of the four distribution companies in Orissa. Now, nearly three-fourths of the power distribution area of Orissa is with us. These three companies are our subsidiaries. The acquisition was 51 per cent of equity by BSES, 39 per cent is with distribution grid of Orissa and 10 per cent is with the employees trust.

Since then we have gone for major streamlining of billing and metering systems. We found that 70 per cent of the consumers did not have or had defective meters. Almost out of nine lakh meters, 6.5 lakh meters required replacements. Last year we replaced two lakh meters, this year we plan to replace four lakh meters as well as install new connections. This has been an important step in our aim towards reducing distribution loss which was more than 50 per cent. We aim to bring it down to 30 per cent in the next five years. This will be a big saving.

When distribution loss is brought down to that extent we can turnaround the company. In next three years, this company should be at break even point. We have been speaking to the regulatory commission to consider the revision in tariffs so that these companies can be brought out of commercial difficulties.

Q: You were planning some mega power projects?

A: We are also exploring a possibility of a mega 1000MW power project at Maithan on the Bihar-Bengal border. The advantages here are the exemption from customs duty, excise and sales tax. The idea is that power produced at these mega projects can be exported to other states and regions and not necessarily to the area where it is produced.

The power trading corporation has agreed to negotiate with the western and northern boards for power supply. The Power Grid Corporation has agreed to augment and create new transmission systems wherever necessary, so that the power produced is evacuated to the regions where this power will be exported. This will be a pithead power station which will reduce the cost of power. There is also mine linked to the power station. We are in discussion with Coal India on how coal development should take place for this project.

Besides, this we have also submitted a report for a 2000 MW project at Pipavav, Gujarat where we have been prequalified for the project.