Saturday, December 8, 2012

Price bid curves and analytics from Bihar Distribution Franchisee projects

Our earlier blog 'Key amendments in Bihar Distribution Franchisee after pre-bid meeting' covered key points raised in pre-bid meeting and its responses in revised amendments.

Bihar State Power (Holding) Company Limited (BSPHCL) has given minimum benchmark input price curve for all the regions, mandating bidders to bid higher than given price curve for all 15 years. The bidders in pre-bid meeting requested to lower or removed the rates, as current rates to allow them  innovating on financial structuring.

See below table with useful bid analytics (click on the image to see enlarged view):

Some top level observations are:
  • Average growth rate of around 20% in initial first 2 years, with max. in first year; followed by receding growth rate to average 10% by 5 years; almost stable and slow receding of around 0.5% until 15 years
  • Gaya has lowest start point at Rs. 1.684/kWh, with PESU highest at Rs. 3.330/kWh
  • Bhagalpur has lowest end point at Rs. 4.124/kWh, with Muzaffarpur highest at Rs. 4.742/kWh  
  • The ratio of max. to min. rates for each curve is close to 0.4 and above  
    • The highest ratio is for PESU, resulting into lowest delta of Rs. 1.085 between the max and min rates of price curve
    •  The lowest ratio is for Gaya, resulting into highest delta of Rs. 2.563 between the max and min rates of price
  • The Levelised Input Price (LIP) calculated at discount rate of 11.08% is highest for PESU at Rs. 4.154/kWh, followed by Muzaffarpur, with lowest for Bhagalpur at Rs. 3.280/kWh
  • Average Billing Rate (ABR) of Gaya is lowest at Rs. 5.310/kWh, revealing greater improvement opportunity for that DF. On the other hand, PESU has highest ABR of Rs. 5.770/kWh
  • Ratio of ABR to LIP is highest 1.726 for Bhagalpur, 1.591 for Gaya and lowest 1.380 for Muzaffarpur. (This ratio is static indication of profit margin for bidders, with close to 1.00 value is indication of lower margins and higher risks for DF operator)
Posted by: Kunjan Bagdia @ pManifold

No comments:

Post a Comment