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

Orissa
GRIDCO. Dispute raised by TEC-Viridian is pending in arbitration. AES-Jyoti
Structure, the pre-qualified bidder was selected to manage CESCO through a process
of negotiation and the management was handed over to the company w.e.f. 1
September 1999. Thus, through a process of ICB, GRIDCO offered 51 per cent stake
to private sector investors, retaining 39 per cent shareholding with it and 10 per cent
share for the Employees Welfare Trust.
It may be mentioned here that no sale of assets had actually taken place, and the assets
have only been assigned to the respective companies. 51 per cent of the share capital
of the distribution business has been sold at a premium to the private investors. As a
result the following scenario emerged:
(i) Thus four DISCOMs, initially incorporated as wholly owned subsidiaries of
GRIDCO, came under the management control of private companies and 51 per
cent stake was transferred of to them. Three of these, namely, NESCO, WESCO
and SOUTHCO were acquired by BSES in April 1999 and the fourth, viz.,
CESCO by M/s AES in September 1999.
(ii) Trading and transmission functions of GRIDCO have been separated w.e.f. 1
April 2005, with GRIDCO looking after trading and Orissa Power Transmission
Corporation Limited (OPTCL) looking after transmission functions.
The new structure of the electricity sector that emerged in Orissa was as follows:
(i) There are independent players like NTPC, OHPC, OPGC, IPPs and CPPs in the
generation sector;
(ii) GRIDCO purchased power under PPAs from the independent generators and
supplied bulk-power to privatised DISCOMs at a bulk-supply price called BST,
fixed by the OERC; and
(iii) DISCOMs, viz., WESCO, NESCO, SOUTHCO and CESCO, under the
management of private sector companies, came into existence.
Private Sector Participation in Generation
In January 1999, 49 per cent share capital of OPGC with 420 MW thermal generation
capacity, having face value of Rs 240.21 crore (approximately), was sold to AES
Trans Power along with management control at a cost of Rs 603.2 crore. Another
State sector power generation concern, Talchar Thermal Power Station (TTPS), with
an installed capacity of 460 MW was sold to NTPC in 1995.
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