Report of Indian Institute of Public Administration ... - Ministry of Power

C. Employees Considerations
State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
(i) Create secure, conducive and rewarding employment opportunities for
qualified personnel; and
(ii) Provide a better working environment for the employees.
D. Private Sector Participation to Promote Competition in the Distribution
Sector
One of the alternatives considered towards achieving the objectives of power sector
reforms was private sector participation in the electricity distribution segment. After
considering various options available for private sector participation, GRIDCO
decided to adopt the joint sector/joint venture route, which was considered to be the
most suitable model. The following sequence was approved:
• The four distribution zones, which were functioning under GRIDCO, would be
converted into four distribution companies as its wholly owned subsidiaries at the
first stage before the private sector participation is invited;
• Private sector participation was accomplished in three stages:
o Qualification of companies/consortia (November 1997 to June 1998);
o RFP and lodgement of bids (July 1998 to November 1998); and
o Negotiation and completion (Dec 1998 to September 1999).
51 companies/consortia initially participated in the International Competitive Bidding
(ICB). Of these, only 13 furnished their Statements of Qualification (SOQ). 11
companies were pre-qualified by the GRIDCO Board, out of which four companies
did not participate in the bidding process because of reasons like Asian Economic
Crisis, Pokharan-II blast and perceived unviable business and regulatory risks. Four
more companies also did not participate in the bidding process. Out of the remaining
bidders, the following three were found to be technically qualified:
• BSES (Now Reliance Energy Limited);
• Singapore Power-Grasim Industries; and
• TEC-Viridian.
BSES was selected for the areas coming under WESCO, NESCO and SOUTHCO and
the management was handed over to it w.e.f. 1 April 1999. As TEC-Viridian failed to
honour its offer, the earnest money guarantee clause of Rs 5 crore was invoked by
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