Bhubaneswar, Oct. 23: Once bitten, twice shy? Not so, for the state government of Orissa.

Having burnt its fingers in power reforms, the Orissa government is again planning to sell power distribution utility Cesco.

The state’s pioneering reforms in the power sector had received a major setback four years ago, when US power giant AES Corporation quit the Cesco management.

In July 2001, AES pulled out of power distribution, citing adverse business climate as the reason.

Now, the government is keen to divest its majority stake in the loss-making company to a private entrepreneur.

The likes of Tata Power, CESC, Ahmedabad-based Electricity Supply Corporation, NTPC Vidyut Vyapar Nigam Ltd and the Bangalore-based GMR have shown an interest in the company.

While the last date for submission of bids is October 31, it is reported that the five suitors have already submitted their expression of interest to Cesco.

The management of Cesco is under the state government, which holds a 49 per cent stake through state-owned Grid Corporation of Orissa (Gridco). Sources said the government has floated tenders for selling a 51 per cent stake, which was under AES’s control, to private parties.

When AES left Cesco, the company had run up arrears of more than Rs 600 crore towards the payment of power purchase from Gridco. Gridco had asked Orissa Electricity Regulatory Commission (OERC) to cancel the licence of AES because it did not honour the shareholders’ agreement. The matter is pending with an arbitration tribunal.

On February 26, the OERC had revoked the licence of AES for power distribution in the state. Gridco had sought the annulment for the US firm’s failure to pay current dues in full and meet the conditions imposed by the regulator.

On the basis of the liability purportedly disowned by AES, the regulatory commission took away AES’s 51 per cent stake in Cesco in a one-sided judgment. Since then, the company has been run by the state government. It has liabilities of more than Rs 1,200 crore, largely as dues from consumers.

In October last year, AES had again showed interest in Cesco. It had submitted a business plan to the regulatory commission for taking over the management of Cesco. But the government did not seem to be interested in the offer.

The distribution business of Cesco is managed by a chief executive officer-cum-administrator appointed by the OERC.

The commission has also appointed a five-member supervisory committee headed by former OERC chairman D.K. Roy to monitor the functioning of Cesco and complete the process of its divestment.

The committee will evaluate the financial and technical bids of the five Cesco suitors and select one of them. However, the final decision will be taken by the commission. The selection process will be completed before March 31.