Wednesday, June 13, 2012

Escrow payment introduced by MSEDCL for Shil-Mumbra-Kalwa

Our earlier blog covered the 'Technical' and 'Financial' criteria of Shil-Mumbra-Kalwa, followed by listing of key performance parameters.

MSEDCL, from its past bid experience, is facing payment recovery issues from few operating distribution franchisee companies. In a recent development, MSEDCL has enforced strict performance requirements from existing franchisee to participate in its latest bid at Shil-Mumbra-Kalwa. This is by way of the following two clauses which have been added freshly:
  • A certificate of 'No Outstanding Dues' of utility (licensee) has been made mandatory for operating distribution franchisees.
  • Recovery of six months average billing amount in advance from future franchisee.
The above first condition will further increase pressure on existing franchisees to clear dues in case they wish to participate in new bids. The latter condition will ensure that only serious bidders with strong appetite to bear initial costs will participate in the future DF bids.

A slight change in QR is made, allowing any Distribution Licensee to participate irrespective of the customer base and no limitation of 40K customers.

Another interesting piece to further strengthen DF model is being experimented in this bid, with start of Escrow account, to derisk the Licensee from non-payment by DF operator.

The Shil-Mumbra-Kalwa bid process is through e-tendering and the revised RFP can be downloaded from the following website of Mahadiscom: A non-refundable fee of Rs. 2 lacs as tender purchase fee is to be paid online. This practice of MSEDCL of charging fees on RFP downloading is getting rightly challenged by bidders, resulting into risk of lower bid participation, fearing which RFP sale date has been extended to 20th June. (Please take a quick poll to register your vote to agree/disagree on this issue, and help set right practices to improve bidding procedures)

See revised Corrigendum.

Posted by: Kunjan Bagdia @ pManifold

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