Patna, Sept. 4: The ambitious power distribution plan for the city has suffered a setback with Essar Power, which had been offered the franchise for the job, not signing the deal with the state electricity board.

Essar was supposed to send its representatives to the office of the Bihar State Electricity Board (BSEB) yesterday, the deadline for finalising the agreement. However, no representative of the company arrived at the BSEB’s office with an “unconditional letter of acceptance of the board’s terms and conditions as envisaged in the request for proposal”. The board has now decided to cancel the letter of intent issued to Essar and look for a new distribution franchisee.

“The board had approached the company (Essar) on Monday, but no one came to us with the unconditional letter of acceptance. The letter of intent issued to Essar will be cancelled and a fresh tender will be issued soon to appoint a new distribution franchisee for Patna. The board will also seize the earnest deposit money of Rs 50 lakh,” BSEB member (finance and revenue) Vinayak Chandra Gupta told The Telegraph today.

No official from Essar Power was available for comment.

Gupta of BSEB said Essar had sought certain changes in the agreement clauses mentioned in the initial Request for Proposal. “We had made it clear that there could not be any deviation in the agreement now. Essar wanted to supply power to the capital from its own sources. This is neither acceptable to the board nor legally permissible,” he said.

Essar, sources said, can get power from its 1,200MW coal-based project located in Latehar district of Jharkhand.

Under the initial proposal, the board was to supply power to Essar, which was to in turn distribute it to consumers in Patna. The agreement further stated that the franchisee might procure power from other sources to meet anticipated shortfalls. At present, Patna requires a supply of about 600MW daily against which BSEB can give about 350MW to 450MW.