The state-run Gridco has also sent the revised power tariff structure to the prospective bidders to help them evaluate the profitability of the ventures. Tariffs were hiked recently by an average 22 per cent.

Though both technical and financial bids have to be submitted together, the companies which qualify in the technical evaluation would be entitled to compete for the final round.

To privatise the distribution network, the state has set up four distribution companies -- the Western Electricity Supply Company (Wesco), Central Electricity Supply Company (Cesco), Southern Electricity Supply Company (Sesco) and the North-eastern Electricity Supply company (Nesco).

In each of these,Gridco plans to offload 51 per cent to the private associate and keep the balance. The private partners have to quote the price for the five lakh shares of Rs 10 each as their 51 per cent stake.

While the bids can be sent for all zones, a maximum of two will be awarded to one company. According to the agreement, the private partner will have management control and it may set fresh guidelines but it would not be able to retrench existing staff.

If plans go as scheduled, the state will be the first to privatise power distribution system. Orissa has already dismantled the board by dividing it into three entities, including Orissa Power Generating Company (OPGC), Orissa Hydel Power Company and the Gridco.

The state has been encouraging private, including foreign participation, in all these companies. It may next initiate reforms in the transmission sector. This is, however, the second attempt in privatising distribution. The state had earlier opted to give only management contract to a private company forwhich it selected the Mumbai-based BSES. Only after 18 months of the management contract agreement was a joint venture to be formed. This, however, did not yield the desired results and was called off.

The state was also the first to set up an electricity regulatory commission which also regulates tariff structure. While the new tariff was proposed by Gridco, it was approved by the Orissa Electricity Regulatory Commission. Similarly, the proposed distribution companies cannot revise tariff without the approval of OERC.

The tariff revision held up privatisation of distribution companies. The state had earlier selected 11 companies during the pre-qualification round and asked them to submit the technical and financial bids by December 9. The list included BSES and 10 consortia - Tata Electric Companies, Viridian Group and Northern Ireland Electricity; Reliance Industries with Eskom; National Grid Corporation, Energy Australia and Modicorp; Hydro Quebec International with HEG Ltd; Electricite de France withInfrastructure Leasing & Financial Services; Singapore Power with Grasim Industries; Enron Distribution Ventures with Emco Transformers; Cal Energy, Northern Electric and Dishergarh Power Supply; United Utilities, AMP Life and the Indure Ltd; and AES Corporation with Jyoti Structures.

These companies were also called for due diligence and data assessment of the different zones. They have also given details of the assets of these companies for evaluation. The final selection of the joint venture partners will be made early next year.