Power cos slam MERC for ‘futile’ bidding

  • Dharmendra Jore, Mumbai
  • |
  • Updated: Aug 04, 2011 01:38 IST

A day after the Maharashtra Electricity Regulatory Commission (MERC) awarded a 25-year suburban power license to Reliance Infrastructure, dejected rival bidders slammed the regulator for holding what they termed a 'futile exercise'.

Dejected bidders alleged that the MERC knew that only RInfra would get the licence, since it was the only contender to have its own network in the suburbs.

MERC chairman VP Raja accepted that the four bids — from Mahavitaran, Ahmedabad-based Torrent, Indiabulls and Lanco — were rejected because they did not have their own network. "It was a legal hurdle that stopped us, and we decided so after seeking legal advice from the solicitor general of India and his deputy," Raja said. This crucial pre-condition, however, did not feature in the MERC's notice for expression of interest.
 
In a statement, the state-owned Mahavitaran said that the company spent over Rs 20 lakh of public money on consultant fees, advertising, commission fees and administrative charges towards the bidding process.

A spokesperson from the company said that the bidding process proved futile as it was revealed only during the bidding hearings that any company seeking a parallel licence must have its own network. "We would not have applied for the permit had we knew about this requirement," he said.

A few other companies that HT spoke with aired similar concerns, but refused to talk on record against the regulator.

Tata Power Company did not apply for the licence since it already holds the licence for the entire city.

Hindustan Times was the first to report the solicitor-general of India and his deputy's opinions in its June 8 edition. The paper also reported that RInfra would get the suburban licence in view of the legal tangles.

 

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