Key Observations: Jharkhand RFPs of Ranchi, Dhanbad and Jamshedpur

Monday, May 14, 2012

Key Observations: Jharkhand RFPs of Ranchi, Dhanbad and Jamshedpur

Jharkhand released RFPs for 3 towns Ranchi, Dhanbad and Jamshedpur. Our earlier blog covered 'Brief comparative analysis of Jharkhand RFPs with different state RFPs'.

Few key parameters of the Jharkhand RFPs are mentioned below:

Tenure for Input based Distribution Franchisee is 15 years for all the 3 towns.
Around 80% or more of the customers are 'Registered Customers' across all the 3 towns. 'Dhanbad' has highest 'Ineffective Customers', which is close to 20%.
Operating areas ranging from 150 to 450 Sq.Km, with Jamshedpur as the smallest area.
High AT&C losses for all 3 towns, with Jamshedpur having highest at 54%.
Distribution Franchisee shall make a minimum capital expenditure equivalent to 50% of Total Revenue Billed for a Base Year (for all 3 cities), in such a way that at-least 10% of the investment plan is spent every year for first 5 years of contract period.
Average Tariff/Billing Rate is lowest for Ranchi (Rs./kWh 3.18), followed by Jamshedpur (Rs./kWh 3.26) and Dhanbad (Rs./kWh 3.33).
The bidder has to achieve a level of 12% AT&C losses at the end of 7 years from the effective date, with year on year target loss reduction for each city.
Base or Benchmark Input Rate will be provided by the JSEB for each year during the pre-bid conference.
Collection Efficiency is highest in Dhanbad (95%), followed by Jamshedpur (94%) and Ranchi (89%).
In case of shortage of 'Supply of Energy' by Jharkhand State Electricity Board (JSEB), the Distribution Franchisee may procure the power from other sources for expected shortfall, subject to concurrence of JSEB and its regulatory body.
For arrears realized by the DF from Permanently Disconnected (PD) customers in the first 3 years, an incentive of 20% shall be payable to DF net of taxes and duties. From 3rd to 6th years, an incentive of 15% and from 6th year onwards, an incentive of 10% shall be payable to DF. Arrears realized for the same period from Live customers will include an incentive of 15%, 10% and 5% respectively.