Attempts to privatise the power distribution network of Patna have failed four times since 2009, the latest being on September 17, the deadline for submission of bids. There were no takers. The Telegraph delves deep to find out the reasons

Q. What is the basic job of the franchise?

Supply and distribute electricity, distribute bills, take down meter readings, collect revenue, maintain low-tension lines and attend to fuse-off calls

Q. When was the fourth tender floated for the distribution franchisee? When was the last date for submission of bids?

On May 29 this year. Last date was July 25. Subsequently, it was deferred to August 28 and then to September 17

Q. Was there any response to the tender?

No

Q. Why are the prospective power distribution companies keeping away?

They have reservations about the “high” benchmark price and want it to be lowered. Also, to reduce the line loss in Patna, they would need to make sustained efforts and invest, which are a costly affair

Q. What is benchmark price?

The minimum base price, which distribution companies would have to pay to buy power from Bihar State Power Holding Company Limited (BSPHCL)

Q. What benchmark price does BSPHCL want?

Rs 4.20

Q. Even in Muzaffarpur, the benchmark price is high. Yet, it got a private player. Why?

The distribution loss is very high in Patna. The private player can make profit by reducing the line loss

Q. What is line loss?

It refers to the loss of energy incurred during transmission and distribution

Q. Can’t the line loss be reduced in Patna?

Patna Electric Supply Undertaking (Pesu) has a line loss of around 34-35 per cent, compared to 54-55 per cent in Muzaffarpur. To bring it down further is a costly affair. So, the private power firms want the benchmark price to be lowered for Patna.

Q. At what price does BSPHCL buy power?

Around Rs 3 per unit

Q. What benchmark price do prospective power distribution companies want to make the franchisee profitable?

Power companies to decide as what would be the price at which they would take up the franchisee job

Q. Investment & extra efforts required for such infrastructure

It (franchisee or power company) needs to install better and high quality distribution transformers and power transformers besides carrying out conductoring, metering and billing. They will have to take anti-theft measures with the help of technology such as pre-paid meters. All these would require investment and manpower on a sustained basis

Q. What does the state government want?

To hand over the distribution franchisee job for Patna to some big player such as Tata, Reliance, CESC or Torrent with the experience of working in the field of power distribution

Q. At what rate is the benchmark price slated to increase every year and how would that affect the franchise’s profits?

The price would increase every year but the quantum of tariff increase would be based on the quantum of reduction in line loss done by the franchise. But ultimately, Bihar Electricity Regulatory Commission would take a final call whether to increase it or not