Pawar unable to clear doubts on franchisee

The first meeting between South-West Nagpur MLA Devendra Fadnavis and deputy chief minister Ajit Pawar on Nagpur power franchisee ended in a stalemate as MSEDCL officials were not able to satisfy Fadnavis' doubts. In the meeting with Pawar, Fadnavis had raised eight points alleging that these lacunae had caused a huge loss to MSEDCL. Leader of opposition in state assembly Eknath Khadse also attended the meeting.

Pawar directed MSEDCL managing director Ajoy Mehta to fix another meeting with Fadnavis and clear the MLA's doubts. In the meeting on Tuesday while Fadnavis claimed that MSEDCL would lose between Rs 1,600 and Rs 2,200 crore due to Nagpur franchisee, Mehta stressed the company would benefit by around Rs 3,000 crore.

MSEDCL has awarded franchisee contract for Mahal, Gandhibagh and Mahal divisions to Mumbai based IT company Spanco.

A senior MSEDCL official told TOI that the dispute would not have arisen if the company had got the franchisee bid document vetted by Maharashtra Electricity Regulatory Commission (MERC). "A meeting of Forum of Regulators, the apex body of all electricity regulatory commissions (ERCs) was held on August 13, 2010, to finalize the standard guidelines for appointment of franchisee. The participants, who included members of private companies, concluded that once the standard guidelines and bidding documents were in place any deviation should be undertaken only with approval of ERCs.

"The experts also decided that the distribution loss rejection trajectory should be finalized by ERC. Any investment by the franchisee after the fifth year should be approved by the Commission," he said. The MLA objected to failure of MSEDCL to change the base year from 2008-09 to 2009-10 even though the tender was awarded after March 2010. He also pointed out that inputs rate promised by Spanco were far lower than the actual ones.

He also said that the revenue proposed by Spanco in 2009-10 was far lower than MSEDCL's actual revenue in the corresponding fiscal. Same is the case for first six months of 2010-11. The MLA said this was a serious issue adding that Spanco's promised revenue in coming 15 years was far lower than the actual revenue.

He said that Spanco had quoted Rs 8,237 crore revenue in next 15 years but as per current tariff MSEDCL would earn Rs 9,731 crore resulting in a loss of Rs 1,504 crore. While MSEDCL had reduced the losses by 15% in last three years, Spanco will reduce it by only 14% in coming 15 years.