Wednesday, October 19, 2011

Third Pre-bid Conference take-away from Madhya Pradesh Distribution Franchisee Bids

The third pre-bid conference organized by GoMP on 15th October saw participation of 20+ prospective bidders, almost the same list of companies that participated in second pre-bid event with minor new additions. This includes NDPL, Torrent Power Limited, Tata Power, Reliance Infra, GTL Limited, SPANCO, CESC Ltd, Enzen Global Solutions Pvt. Ltd, Essar Power, GMR Energy, Dainik Bhaskar, Adani Power Ltd, Lanco Infratech Limited, A2Z Powertech, Dalmia Bharat Enterprise, Ramky, BLA Power Pvt. Ltd,  Shyam Indus Power Solutions Pvt Ltd, Era Infrastructure Engg Ltd., Agrawal Power Pvt. Ltd, Eltel Engineers Pvt. Ltd, Lanka Electricity Pvt. Ltd. (LECO), Moser Baer and few others. The list includes many first time entrants in the distribution sector with one international participation from LECO group. (See our earlier blog on second pre-bid conference takeaways)

GoMP has revised the Distribution Franchisee boundaries to city/town level from earlier entire district level and has also removed any minimum benchmark input prices. This potentially makes the bidding more favorable to bidders, but at the same time more competitive. See our earlier shared bid analytics and comparison results of old and new RFPs:
One strong message passed by Energy Secretary Mr. Mohd. Suleman was that there will be no further revisions in RFPs and no further delays in bidding dates. He guaranteed 90+% accuracy of baseline data shared in RFPs and reiterated the need for trust between utility and DF operator to further correct/refine any mutually identified issues. One strong non-negotiable point put forth by utility was high customer satisfaction to be guaranteed by DF with 24 hours power supply and improved customer services.

Some key points of discussion which were raised by bidders were as follows:
  • AT&C loss reduction trajectory - AT&C loss reduction target of 15% by Dec. 2013 was looking difficult even with existing investment in almost 100% covered R-APDRP towns.
  • Franchisee's Event of Default related to 100% Metering & Billing - As per the revised RFP, after completion of 24 months from the effective date, if any consumer is billed on provisional basis for consecutively 2 months, then it will be considered as event of default. There were requests, if this time frame could be further relaxed.
  • SAIFI and SAIDI penalty, if any - If the targets set for SAIFI and SAIDI mentioned in RFPs are not met, then what are the penalties and who will calculate those penalties. Bidders requested to quantify more details about this point in the RFP.
  • Capex calculation – RFPs gave mandated capex to be invested in each town. Bidders requested to release the assumption sheet for calculating this capex.
  • RFP baseline data authenticity – Most bidders put low confidence on data shared in RFP, including some claiming ABR inflated by as high as 20%
See below more detailed presentation shared by PwC during the pre-bid conference:

Please join more conversation with other experts and competitors on MP bidding at our Linkedin Community of Interest 'Power Distribution Franchisee'. 

Also we have detailed local intelligence reports on customer opinion, preferences and satisfaction for distribution utilities for the 3 towns of Gwalior, Ujjain and Sagar. The results are presented using intuitive GIS maps at town level to give localization of 28+ power and service quality attributes. This will allow bidders to get increased ROI from their on-site technical due-diligence by pointing location specific key areas of concerns for power delivery services and also better estimate/validate the required capex and opex. Each site comprehensive report is priced at Rs. 25K only. A consolidated 3 towns top level comparison report is also available at the same price. (See report sample and contact Rahul Bagdia @ for more available pricing options and discounts)

Post by Kunjan Bagdia @ pManifold

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