Deloitte, SBI Cap to ad­vise on pri­vati­sa­tion of dis­coms

Govt is look­ing at com­plet­ing the process be­fore De­cem­ber

Hindustan Times (Jalandhar) - - HTBUSINESS - Ut­pal Bhaskar ut­pal.b@livemint.com

NEWDELHI: Deloitte and SBI Cap­i­tal Mar­kets Ltd (SBI Cap) have been hired as con­sul­tants to help with the pri­vati­sa­tion of elec­tric­ity dis­tri­bu­tion com­pa­nies (dis­coms) in Union ter­ri­to­ries, two peo­ple aware of the devel­op­ment said.

While state-run Power Fi­nance Corp. (PFC) has ap­pointed Deloitte to help with the sale process to pri­va­tize dis­coms in Puducherry, Chandigarh and An­daman and Ni­co­bar Is­lands, SBI Cap has re­ceived the man­date for Dadra and Na­gar Haveli, Da­man and Diu, Jammu and Kash­mir, and Ladakh. Lak­shad­weep is not be­ing con­sid­ered in this phase of pri­va­ti­za­tion be­cause of its low elec­tric­ity load.

A Union power min­istry spokesper­son con­firmed the devel­op­ment.

The ap­point­ment of th­ese con­sul­tants to help with the prepara­tory work for the ex­er­cise, ex­pected to be com­pleted by De­cem­ber, shows that In­dia has stepped up ef­forts to usher in next-gen­er­a­tion power sec­tor re­forms. The power min­istry will is­sue the stan­dard bid­ding doc­u­ments. Mint re­ported on 15 May about In­dia’s plan to pri­va­tise all elec­tric­ity dis­coms in Union ter­ri­to­ries that to­gether have an en­ter­prise value of around $700 mil­lion.

“The gov­ern­ment is look­ing at com­plet­ing the process be­fore De­cem­ber. The man­date is to com­plete the ex­er­cise within eight months start­ing June,” said one of the peo­ple cited above.

Un­like dis­coms in states, which fall un­der the re­mit of state gov­ern­ments, those in the Union ter­ri­to­ries are ad­min­is­tered di­rectly by the Cen­tre.

A Deloitte spokesper­son in an emailed re­sponse said, “We are bound by con­fi­den­tial­ity obli­ga­tions and are un­able to com­ment on client-spe­cific mat­ters.”

Queries emailed to spokes­peo­ple of SBI Cap­i­tal Mar­kets Ltd and PFC on early Fri­day morn­ing re­mained unan­swered.

With their fi­nan­cial health weak­ened by the pro­longed lock­down, states are grad­u­ally com­ing around to the idea of pri­va­tiz­ing their debt-laden dis­coms to raise funds.

There is grow­ing in­ter­est in the UT dis­coms on of­fer. Mint ear­lier re­ported that lo­cal com­pa­nies such as state-run NTPC Ltd, elec­tric­ity gen­er­a­tion and dis­tri­bu­tion firm CESC Ltd, Tor­rent Power, Greenko Group, Tata Power, Na­tional In­vest­ment and In­fra­struc­ture Fund (NIIF) and Adani Group may be in­ter­ested in the as­sets. Large for­eign util­i­ties such as Italy’s Enel Group, Malaysia’s Te­naga Na­sional Bhd, Elec­tricite de France SA and Hong Kong’s big­gest elec­tric­ity provider China Light and Power Co. Ltd are also ex­pected to par­tic­i­pate. A third set of prob­a­ble in­vestors in­clude funds such as Brook­field As­set Man­age­ment Inc., CDPQ, CDC Group Plc, Mac­quarie Group and Ac­tis Llp.

The race for se­cur­ing dis­com li­cences is heat­ing up. Bil­lion­aire Gau­tam Adani-owned Adani Group, RP-San­jiv Goenka group’s flag­ship elec­tric­ity gen­er­a­tion and dis­tri­bu­tion firm CESC Ltd, and Tata Power Co. Ltd are among those who have shown in­ter­est in ac­quir­ing Odisha’s three elec­tric­ity dis­coms. Also, NTPC Ltd has evinced in­ter­est in ac­quir­ing a 51% stake each in BSES Ra­jd­hani Power Ltd and BSES Ya­muna Power Ltd in Delhi. Enel Group of Italy, Tor­rent Power Ltd and Greenko Group have also sub­mit­ted non­bind­ing of­fers to pick up stakes in the two Re­liance In­fra en­ti­ties.

The ap­point­ment of th­ese con­sul­tants shows that In­dia has stepped up ef­forts to usher in next-gen­er­a­tion power sec­tor re­forms

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