The Supreme Court of India has lifted the suspension order imposed by the Bombay High Court on the privatization process of the distribution company (DISCOM), according to the update provided to the Bombay Stock Exchange by Torrent Power. The bidding process for a 51% stake in the DISCOM power for the union territories of Dadra & Nagar Haveli and Daman and Diu, was previously halted due to a court order.
The Superior Court had discontinued the auction after a public interest litigation was filed against the privatization of DISCOM.
At the auction held in March this year, Torrent Power had emerged as the highest bidder to acquire the DISCOM in the union territory of Dadra & Nagar Haveli and Daman and Diu.
The acquisition was part of the Government of India's initiative to privatize DISCOMs to make them more efficient.
In December of last year, Dadra & Nagar Haveli and Daman and Diu had invited is putting out to tender to acquire a 51% stake in its DISCOM, responsible for the distribution and retail supply of electrical energy.
Under the agreement, Torrent Power would distribute almost 25 UB of energy to more than 3.8 million customers and serve a maximum demand of more than 5,000 MW.
In January of this year, the Supreme Court had issued Similar orders, suspending a stay order issued by the Punjab and Haryana High Court to privatize DISCOM of Chandigarh.
At the beginning of September last year, the Ministry of Energy had issued draft standard bidding documents to select bidders to acquire a majority stake in the distribution licensees for the distribution and retail of electricity.
Last year, the central government went up with a proposal to privatize DISCOM in the union territories. The DISCOMs in the union territories are under the administration of the central government, while the respective state governments govern those of the states. The TUs include the Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, and Daman and Diu, Delhi, Jammu and Kashmir, Lakshadweep, Ladakh and Puducherry.
In January of this year, Tata Power had Announced its acquisition of Western Electricity Supply Company of Odisha and Southern Electricity Supply Company of Odisha. In December 2019, Tata Power received the letter of intent from the Odisha Electricity Regulatory Commission to distribute and supply electricity in the five Odisha circles that constitute the Odisha Central Electricity Supply.
Previously, Mercom had written on the business models through which DISCOMs could be privatized. These can range from licensing, distribution franchise and profit sharing models. Despite the $ 900 billion aid package provided to DISCOMs, DISCOMs owed $ 124.2 billion (~ $ 1.66 billion) to renewable energy generators (excluding disputed amounts) in overdue payments on 193 outstanding bills as of the end of May 2021.
Rakesh is a staff reporter for Mercom India. Before joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and deputy editor at bcfocus.com, CIOReview / Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh has a BA in English from Indira Gandhi National Open University (IGNOU). More articles by Rakesh Ranjan.
