MUMBAI, November 27: The government of Orissa on Thursday announced the privatisation of the four electricity distribution companies in the state. The distribution business is currently carried on by Grid Corporation of Orissa (Gridco) which also own and operates the power transmission business in the State.

In April 1996, the state government had transferred the electricity transmission and distribution business from Orissa State Electricity Board (OSEB) to Gridco.

Presently, Gridco has access to a generation capacity of approximately 2,730 MW per annum from OPGC, OHPC and Orissa's share from the central power plants. It owns and operates a transmission and distribution network which serves approximately 1.2 million consumers.

Gridco's distribution system comprises a total of approximately 1,10,000 km of lines and sub-stations which are dividend into 10 circles. These circles have been consolidated into four zones and the business of each zone is to be transferred into four separate companies which have already been incorporated as 100 per cent subsidiaries of Gridco.

Gridco is now commencing the privatisation process which will involve inviting bids for a 51 per cent stake in each of the four zonal companies though a process of international competitive bidding from pre-qualified companies or consortia. Gridco will continue to carry on the transmission business in the state. This is an important milestone in the extensive programme of reform of the electricity system in Orissa which has been underway since 1993.

Other achievements under the programme include the establishment of the first independent electricity regulatory commission in India, the Orissa Electricity Regulatory Commission (OERC) which is responsible for setting tariffs. Gridco continues to implement a substantial investment programme in both its distribution and transmission businesses to improve power supply and to reduce losses. It has recently signed a power purchase agreement with AES of the US to develop one of India's first IPP projects as part of Orissa's measures to secure adequate generation capacity.

These pioneering efforts and accomplishments have been strongly supported by a World Bank loan of $350 million and aid assistance from the Department for International Development (DFID) of the UK.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.