The Maharashtra government is hopeful of soon appointing distribution franchisees in two circles, bidding for which is currently underway. Franchisees for the Malegaon and Mumbra-Kalwa circles will be made by end of December this year, according to Arvind Singh, Principal Secretary (Energy), Government of Maharashtra. Singh was addressing a select media gathering during the “Distribution Utility Meet 2018”, organized by Tata Power in Mumbai recently.
While admitting that the distribution franchisee model did fail in some circles in Maharashtra, Singh highlighted that the state also had some successful examples like Bhiwandi and Nagpur. The franchisee model failed in Aurangabad and Jalgaon, Singh observed, adding that there were some shortcomings in the bidding structure that have since been corrected. “Companies with no experience in the power sector were allowed to get in,” the Principal Energy Secretary said. “These were mainly IT companies who got in and thought they could manage the business by hiring people with power sector experience, but they were unable to do it,” explained Singh.
The bidding process for the Malegaon and Mumbra-Kalwa circles is getting good response from bidders, including private distribution utilities.
It may be recalled that the DF mandate of the Aurangabad circle, handed over to Global Telesystems Ltd (GTL) in May 2011 was officially revoked in November 2014. Similarly, the Jalgaon circle that was handed over to Crompton Greaves (CG) in November 2011 was reclaimed by MSEDCL, the state power distribution utility, in August 2015.
On the other hand, the ten-year contract of Torrent Power, the distribution franchisee for the Bhiwandi circle appointed in January 2007, has been extended for another ten years, up to January 2027. Discussing the reasons for the success in the Bhiwandi circle, Arvind Singh remarked that the private franchisee has been able to raise resources and invest in the upgrade in the distribution network; this has helped the customer. “If privatization leads to more investment and better service, consumers will welcome it.”
The Nagpur franchise, comprising divisions of Civil Lines, Gandhibag and Mahal of the Nagpur Urban circle, was handed over to private franchisee Spanco, an IT-centric company, in May 2011. The circle was subsequently acquired by Essel Group, which has managed to stage a turnaround. In a recent interaction with T&D India, Brajesh Singh Bhadauria, CEO, Essel Utilities, said, “We have come a long way, ever since we took over from Spanco. Our performance at Nagpur has been one of best by any DF in country despite many operational and systemic challenges. We have not only reduced AT&C losses significantly but also have improved power reliability. Serving 5.6+ lakh households is cumbersome work, particularly when the city has peculiar political, social and demographic constraints. When we took over in 2011, AT&C losses were around 35 per cent which have been reduced to 14.5 per cent in the year 2017-18.”
Featured photograph shows a bill collection centre of Essel Utilities in Nagpur (Photo Courtesy: Essel Utilities)